Brazilian outlook clouds Fiat Chrysler's growth plans
* Company aims to raise Latin America sales by 44 pct by 2018
* Higher competition in Brazil threatens margins
* Boost seen from new Brazil plant, but goals aggressive -analysts
By Agnieszka Flak and Alberto Alerigi
MILAN/SAO PAULO, Oct 28 (Reuters) - Fiat Chrysler Automobiles hopes to raise vehicle sales in Latin America by 44 percent over five years but a recent big drop in volumes and weakening outlook in Brazil, the region's biggest economy, threaten to spoil its ambitions.
Two years ago Latin America still accounted for nearly a third of FCA's profits, helping to offset a slump in sales in Europe.
But that contribution had dropped to 17 percent last year and just 1 percent in the first half of this year, hit by lower tax incentives in Brazil, higher input costs, currency effects and weakening local economies.
FCA's sales in Latin America accounted for a fifth of the group's total vehicle sales last year and it expects to maintain that regional share as overall annual group volumes are forecast to rise by 60 percent to 7 million cars by 2018, including 1.3 million in Latin America.
When FCA unveiled its plans in May it referred to an IHS Automotive forecast for industrywide car and light commercial vehicle (LCV) sales in the region rising 17 percent to 6.9 million vehicles by 2018. In its latest forecast, however, IHS has cut that figure to 5.7 million vehicles, a fall of 3.3 percent on last year's level. Continuación...