Denise Farinos, CFO of GM South America, on Shifting Gears in Emerging Markets
That Denise Farinos, CFO of General Motors South America, has a big job is an understatement. She manages the finances of what some executives have described as the U.S. automaker’s most valuable asset in terms of growth and return on investment. The jewel in the crown is Brazil, which with nearly 700,000 General Motors vehicles sold last year, trails only the company’s U.S. and China operations in unit sales worldwide.
A 45-year-old Sao Paulo native and a 22-year GM veteran, Farinos said in a recent interview with Universia Knowledge@Wharton from GM headquarters in Sao Paulo that she’s lucky to be crunching the numbers during this time of growth.
Auto sales are booming across the region thanks to expanding economies, rising incomes, easier credit and appreciating local currencies that make imported vehicles cheaper. With its leading 20% market share in South America, GM is riding the wave. Overall car sales in Brazil, in particular, grew 11% last year and should rise by at least 5% in 2011.
But even though these are undoubtedly good times for automakers in South America, it’s not all a smooth ride for Farinos.
Since the economic downturn, GM had been more known worldwide for the bailout it received from the U.S. government than for the cars it sold. With the government paid back, restructuring and an IPO raising US$20 billion last year, the fears for the company’s survival have passed.
But other challenges are ongoing for GM’s finance executives. For Farinos, that includes managing constant currency fluctuations that have a direct bearing on GM’s domestic market and its ability to increase the number of vehicles it exports.
She must also keep an eye on measures being pursued by governments concerned about a “credit bubble” and rising inflation. On April 7, for example, Brazil’s government under Dilma Rousseff slapped a 3% surtax on new loans to try to slow credit growth, a move that could dampen car sales.
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