Highlights of the year’s major events in the South American auto industry:

Fiat issues the first signal of a cool-down in the Brazilian market’s new-vehicle sales, forecasting in January a 5% increase for 2011. The industry grew 7% in 2010. “I am confident we will be able to at least duplicate the 2010 performance in Brazil,” Fiat CEO Sergio Marchionne says.

Nissan reveals plans to invest about $1.5 billion in an assembly plant in Resende, state of Rio de Janeiro, to expand its presence in Latin America. At the same time, the Renault-Nissan partnership says it will introduce a number of new models in Brazil, with hopes of doubling its market share. Renault also will expand an existing factory.

• Brazil enacts tax increases aimed at protecting domestic auto makers from an upsurge in imports by raising the cost of bringing a vehicle into the country by 30%. To escape the levy, foreign companies must source 65% of their content locally and also invest in local research and development.

General Motors begins selling the Chevrolet Cruze in Brazil, the first vehicle in a 9-product offensive over the next 18 months aimed at recapturing lost market share and perhaps challenging local sales leaders Fiat and Volkswagen.

• The Brazilian government cuts the mix of ethanol to gasoline as low as 18%. Up to now, gasoline sold in the market has had a 25% blend of sugarcane alcohol, which helped keep pump prices in check.

BMW announces intentions to build cars in Brazil, eventually selecting Sao Paulo as the site for its first assembly plant in Latin America. BMW executives cite the “significance and prominence of the market,” as well as “the development of Brazil over the past 10 years.”

• Denise Johnson, head of General Motors Brazil, steps down after eight months on the job and amid a decline in the auto maker’s market share in the country. Jaime Ardila, president of GM South America, takes over the subsidiary.

Volkswagen in February knocks 11-year market-leader Fiat from the top sales position in Brazil by claiming a 23.5% market share. Fiat sells more cars in the month, but VW beats the Italian auto maker with combined January-February results.

• Brazil’s light-vehicle production rises 18.7% in February from January to about 572,400 new cars and trucks for the first two month. Production increases 2% over like-2010.

• General Motors offers the first look at its next-generation Chevrolet Colorado midsize pickup at an event in Thailand. Developed by a collaboration of GM South America and the auto maker’s Thai operations, the truck will be sold in Brazil and the U.S. in addition to other global markets.

• Brazil’s new-vehicle sales fall 14.4% in March, compared with like-2010, another signal of a softening market after the government hikes interest rates.

Hyundai announces a new financing partnership with Banco Santander. The Korean auto maker is building an assembly plant in Piracicaba, Sao Paulo, state that is expected to build 150,000 vehicles annually. Production is slated to start in second-half 2012.

• The Brazilian government tinkers further with its massive ethanol industry, announcing new regulations locking producers and distributors into fixed 1-year supply contracts. The goal is to curb shortages and price spikes.

• Government officials announce nontariff trade barriers on imported cars and car parts in its continuing effort to stem the flow of Asian products into Brazil. Measures include tighter licensing requirements, which delay imports entering the country and give domestic auto makers time to regain market share.

• Fiat moves to rebadge Chrysler products in Latin America as Fiats, a move that will allow the merged auto makers to grow faster in the region. Fiat has about 700 dealerships in the region and Chrysler has just 35.

• Brazil’s new-vehicle sales in April rise 4.6% compared with like-2010, but dip 5.5% from March. May deliveries jump 7.6% from year-ago, up 10.2% from April.

• Mercosur and Mexico ink an agreement liberating all bilateral auto industry trade between the regions in an effort to “grow and advance together” in the same spirit as the Asians. Mercosur includes Brazil, Venezuela, Argentina and Uruguay among other South American nations.

Toyota cuts back production at plants in Argentina and Brazil due to a shortage of parts after the earthquake and tsunami in Japan. Honda does the same at its site in Brazil.

• General Motors and the Argentine government reach an agreement on reducing imports of the auto maker’s products to the country. Argentina, like neighbor Brazil, wants to strike a better trade balance. GM will invest $154 million at its Villa General Alvear assembly plant in Sante Fe, Argentina, to offset the import reduction.

• Argentina and Brazil agree to meet monthly on trade issues, ultimately resolving a dispute that began with Brazil’s new import taxes on all foreign-built vehicles.

• More dramatic steps to retain market momentum are taken by Brazil’s government, which offers billions of dollars in new financing and tax breaks to factories struggling with Brazil’s overvalued currency, which includes automotive. The goal is to fix a potentially dangerous economic imbalance due to growing imports.

• The Brazilian government announces plans to intensify quality inspections of imported vehicles, as the country seeks to manage a flood of Chinese products weakening domestic auto makers’ sales.

• Chinese auto maker JAC announces plans to invest $600 million to build an assembly plant in Brazil and carve out more market share. The factory is expected to open in 2014 with annual capacity of 100,000 units.

Mazda says it will establish a sales-company partnership in Brazil with Japanese trading-house Sumitomo, with hopes of enhancing its presence in the growing Central and South American markets. The cars will be imported from the Japanese auto maker’s upcoming factory in Mexico.

• Fiat gives auto workers in Argentina a 1-week paid vacation to trim growing vehicle stocks. The facility builds the Siena for sale in Brazil, where the market is cooling.

• Workers at GM’s Sao José dos Campos plant in Sao Paulo go on strike to demand a wage increase, as Brazil’s vehicle sales and production decline.

• Auto makers cut back second-half output plans due to bloated inventories.