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Business / Auto China

Chinese carmakers accelerate into Brazilian market

(Xinhua) Updated: 2014-03-27 11:02

BEIJING - Chinese carmakers have started to steer more business toward the Brazilian market due to growing appetite for cars in Brazil and booming vehicle production in China.

Central China-based Jianghuai Auto Co announced on Wednesday that it expects its factory in Brazil to begin operating in the next year with annual capacity at 100,000 units and total investment reaching $600 million.

Chinese carmakers accelerate into Brazilian market

Chinese carmakers accelerate into Brazilian market

It is typical of the efforts major auto firms in China are putting into tapping the world's fourth-largest auto market, which has been dubbed a bridgehead for Chinese companies to start their global journey.

What intrigues Chinese investors most is the brightening market outlook, as consumer spending is forecast to surge around the 2014 FIFA World Cup and 2016 Summer Olympics in Brazil.

"A great opportunity" is how JAC vice president She Cairong describes developments in Brazil.

The rapidly advancing Chinese economy has enabled the country's car producers to extend their global reach with abundant capital and mature technology, said Hayle Gadelha, head of the Trade and Investment Promotion Office under the Embassy of Brazil in Beijing.

It was only in 2012 that Brazil dampened the prospects of Chinese cars in the country by fine-tuning its tariff policy, making it more favorable to local producers but harsher on auto imports. The move prompted Chinese carmakers, many of which were already eyeing Brazil, to instead quicken their localizing pace.

A lot can happen in the space of two years, however. JAC is not the only China brand to make a big move into Brazil.

BYD, leading China's new energy sedans, is also planning a $100-million plant in Sao Paulo.

Beijing's BAIC Motor is mulling investing in an SUV plant, Gadelha disclosed to Xinhua, noting that the plan received a warm welcome from quite a few localities in Brazil.

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