Mirror maker Donnelly Corp. is expanding its interest in Brazil, taking full ownership of a 50-50 joint venture operation in Sao Paulo.
The wholly owned subsidiary Donnelly do Brasil will injection mold interior and exterior housings and assemble mirrors for automakers in South America. Holland, Mich.-based Donnelly plans to expand the facility sometime next year.
"We're still in a program-launch situation [there] for now," Phil Sotok, international business manager, said in a Feb. 27 telephone interview. "Within 18 months, we expect we will outgrow our current facility."
The 25-employee plant opened in 1998 as a joint venture between Donnelly and headlight maker Arteb Industrias SA, called Donnelly/Arteb Ltda. That business provided Donnelly with an entry into production in South America.
"What we initially tried to do was just to break into the Brazilian market, and with Arteb's help, we did that," Sotok said. "Now we've decided it is better to go it alone and get further involved."
The companies did not release details of the deal.
The facility does about $2 million in business annually, making mirrors for General Motors Corp.'s Corsa, Astra, Vectra and Celta vehicles. Sotok said the company sees room to expand Donnelly's market reach in South America, even though the auto industry has cooled off in Brazil.
Automakers turned out about 1.3 million cars last year, down from a record of nearly 2 million in 1997. The industry now is operating at about 65 percent of capacity.
"Back in 1997, everybody went down there, starting investing in it," he said. "That cooled off, but now companies that may have put it on hold are looking at investing again."