China car giants rush into Brazil with dreams of dominating a continent

Straits Times

23-07-2025

Great Wall Motor took over the Mercedes plant in Brazilian town of Iracemápolis, near São Paulo, after the German carmaker closed shop in 2021.
SíO PAULO – A two-hour drive beyond the traffic jams of São Paulo, past the vast valleys of sugar cane, one of the first Chinese battery-powered car factories in the Americas is getting ready to open.
Its goal is to reinvent the way Brazil drives, and ultimately, the rest of Latin America, much as Chinese automakers have already done across much of Asia and want to do in Europe.
Until recently, this factory was run by German giant Mercedes-Benz. Today, it's owned by Great Wall Motor, a company that is now one of China's leading exporters of stylish, affordable electric vehicles.
The change in hands reflects a profound disruption for one of the world's most vital industries. If American and European petrol-guzzling cars once dominated global tastes and trends, that era appears to be fast turning to China's favour.
Today, not only does China make and export more cars of all types than any other country in the world, Chinese firms dominate the global manufacture of battery-powered vehicles of the future. They also control the supply chain for virtually everything that goes into those cars.
China's EV s are among the most advanced in the world. Some today go as far on a single charge as top-of-the-line Teslas, at lower prices. One Chinese carmaker, BYD, short for Build Your Dreams, has developed technology that can deliver a full charge in just five minutes.
Little wonder that Tesla sales in China are lagging, and that the United States, under both Presidents Joe Biden and Donald Trump, have essentially banned Chinese car imports.
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For China, that leaves the rest of the world.
Its electric and hybrid manufacturers have set up, or are in the process of setting up, factories in Hungary, Indonesia, Russia, Thailand and Turkey. These efforts, including Great Wall's Brazilian factory, are part of a globe-spanning campaign by China to seize a major share of the world's auto industry.
Western auto giants are alarmed.
'We are in a global competition with China,' Jim Farley, the chief executive of Ford Motor, said at the Aspen Ideas conference in June. 'It's not just EVs. And if we lose this, we do not have a future at Ford.'
Great Wall Motor took over the Mercedes plant in the industrial town of Iracemápolis, near São Paulo, after the German carmaker closed shop in 2021, blaming a slump in luxury car sales. BYD took over a Ford factory after years of poor sales and steep losses forced the US car giant to end its long history of manufacturing in Brazil.
Brazil, the world's sixth largest car market, is trying to take advantage of the trend, instead of being steamrolled. It's prodding companies, no matter where they're from, to make cars on Brazilian soil, the less polluting the better, while also imposing steadily rising tariffs on imports.
It hasn't all been smooth sailing. There have been union clashes over Chinese labour practices. But the government's overall message: If you want access to our car buyers, then come and create factories and factory jobs here.
'We don't want to be an importer of technologies produced in other countries only,' said Rafael Dubeux, special adviser to the Finance Ministry, in an interview in Brazil's capital, Brasília. 'We also want to take advantage of this profound change in the world, in manufacturing facilities, so that Brazil also has a part in the value chains that we think are the ones that will prevail.'
At least three Chinese firms are opening assembly plants in Brazil. In addition to Great Wall Motor and BYD, another Chinese automaker, Chery, has teamed up with a Brazilian company, Caoa, to produce cars in central Goias state.
Nevertheless, Marcio Lima Leite, head of the Brazil automaker association, remains worried. The new Chinese auto plants are mainly assembling cars with components imported from China, including the most valuable component, batteries. That, he said, will not advance the industry in Brazil.
'It's very important to have competitiveness in Brazil, to produce the new technology in Brazil,' he said.
Chinese carmakers have had to bend to local needs in important ways. In Brazil, that means the needs of the powerful ethanol industry. Ethanol is produced from the country's huge sugar cane crop, and Brazilian law requires every litre of petrol to be a little more than 25 per cent ethanol.
So the auto companies aren't just making fully electric cars in Brazil. They are also having to make hybrids that run partly on the petrol-ethanol blend and partly on batteries. NYTIMES