Cherys Fulwin 2

Chery's Fulwin 2

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The Chinese will by year end invest at least US$12bn in several segments of the Brazilian economy, from agribusiness to industry. The increase is a mammoth 14,000% over 2008.

In the auto industry, Chery is first automaker to build a plant in Brazil, the 12th country to host a production unit outside China. The firm bills itself here as the largest, independent Chinese automaker, unlinked to western brands.

Construction work starts in 2011 and ends in 2013. Initial investment is $130m for 50,000 units yearly. In total, it will pour in $400m and installed capacity will rise to 170,000 units.

Plans include a tech centre to customise products to the Brazilian buyer’s preferences, including flexible-fuel engines. Yet before that it expects to debut the flex engine in the still-imported Fulwin 2, hatch and saloon, in May 2011.

Additionally to the Fulwin 2 (a Renault Sandero-sized compact), it will build the basic compact S18 in Jacareí, a town 50 miles east of São Paulo City. That means the state of São Paulo, cradle of the automotive industry, will resume its earlier status of representing 50% of the country’s overall production when new Toyota and Hyundai manufacturing plants are considered.

Although nine Chinese brands showcased 31 new models at the recent São Paulo auto show, there is a clear structural difference among importers. And they all still have to overcome consumer suspicions about quality and safety of PRC products.

The importer with the most firepower is SHC Group, owned by bold entrepreneur Sergio Habib, and representative for JAC (Jianghuai Automobile). Owner of several Citroën, Ford and Volkswagen dealerships countrywide and also the Jaguar and Aston Martin official importer, Habib sells over 50,000 cars yearly here.

As of March 2011, SHC will simultaneously open 45 dealerships aiming to sell three JAC models (J3, J5 and J6). Yet in 2012 it expects to take 1% of the Brazilian market (commercials excluded), or 30,000 units a year.

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