BRAZIL: Chinese pile in to manufacture in growing market
Brazil, one of the world’s fastest growing auto markets, attracts many players. There are currently 49 auto and LCV brands here alone, more if heavy trucks are included.
Consultantancy firms foresee optimistic numbers. Roland Berger expects up to 10% growth in some periods until 2020, when the market is likely to reach 6.6m units yearly. PricewaterhouseCoopers is more cautious: 6% average annual expansion until 2017.
Consequently, Brazil could overtake Japan as the world’s third largest market by 2015 - it ranked fourth in 2012.
Matthias Wissmann, VDA president, noted that just 14% of Brazilians own a car, compared to 75% in 'mature' countries. And the medium class keeps improving its buying power at a rate above growth in the economy, which leaves room for selling even more cars.
Chinese brands are after a good chunk of this growth by betting on low cost models and luring in to showrooms those who've never owned a vehicle.
The new Inovar-Auto industry regime obligates newcomers to manufacture here. Chery has spent BRL800m/USS400m on a manufacturing plant in Jacareí (São Paulo state) which will start production late this year.
Group SHC’s JAC, which also has a plant under way, has just announced an additional BRL100m/US$50m spend to make the T140 light truck at the same Camaçari (Bahia) site.
Brazilian Group CNAuto is spending BRL250m/US$124m in Linhares (Espírito Santo) to make a range of Hafei microvans and micro-pickup trucks.
On neighbouring land, with a higher spend of BRL600m/US$300m, Mozambique’s Group Districar will build Changan’s MiniStar micro-commercial vehicles and Haimas H2 and H3 cars. Under the same roof, will be assembly of Mahindra and Mahindra's Ssangyong Korando SUV and Actyon Sports pick-up, now imported by Districar too.
Rumours are that Great Wall is negotiating with the state of Pernambuco's government, but that is not confirmed yet.
Others Chinese intending to produce medium and heavy trucks are Foton (BRL600m/US$300m); Shacman (BRL1b/US$500m); Shiyan Yulihong (BRL185m/US$92m); and Sinotruk (BRL300m/US$150m).
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