Chinese automaker Great Wall confirms R$10 billion investment in Brazil

The Chinese automaker Great Wall Motors announced this Thursday (27) its plans for Brazil. The company will assemble cars in the city of Iracemápolis (São Paulo countryside), at the unit that belonged to Mercedes-Benz.

The company estimates an investment of R$ 10 billion in the long term, divided into cycles.

The first stage started in 2021 and runs until 2025, with a value between R$4 billion and R$4.5 billion. All vehicles produced will be hybrid or 100% electric.

According to Pedro Betancourt, director of external and governmental relations at Great Wall, 2,000 jobs will be created in the region by 2025. The company believes that it will be able to produce the maximum capacity of the factory — around 100 thousand vehicles per year — when the market is normalized. . They will be models aimed at the domestic market and also for export.

The goal is to achieve 60% local content over the next three years.

One of the platforms adopted in Brazil will be a sports utility vehicle with a 1.5 turbo gasoline engine combined with an electric one, with power starting at 230 hp, but can exceed 400 hp, according to the calibration.

The hybrid system will be plug-in, making it possible to recharge the car from the outlet and run without burning fuel in urban use.

Great Wall’s hybrid cars will be sold under three brands: Tank, Haval and Poer. there are 10 models in development for Brazil, always with off-road style.

The first launch will be a vehicle imported from China, which will hit stores at the end of this year. The company’s first national car is scheduled for the second half of 2023.

There will also be the premium brand Ora, focused on 100% electric vehicles. This Great Wall division gained fame in 2021 when it presented a modernized copy of the Volkswagen Beetle, called Punk Cat. This model is already registered in Brazil, but without a release date.

The company says that there will be technologies such as facial recognition and the use of artificial intelligence with a 5G connection. All models will be equipped with semi-autonomous steering assistance systems, such as lane readers and automatic braking in the event of an imminent collision.

The assembly of the dealer network is still under negotiation. Oswaldo Ramos, commercial director of Great Wall in Brazil, said that there are meetings with concessionaire groups from all over Brazil, and, in addition to traditional commercialization, there will be the option of long-term rental.

The Chinese automaker was created in 1984 and today has 19 factories in the world, already counting on the new Brazilian unit. Its cars are sold in around 60 countries. It is the seventh most valuable brand in the automotive sector, with an estimated value of US$ 76.7 billion (R$ 416.6 billion).

Koma Li, head of operations for Great Wall Motors in Brazil, said the company, which also produces batteries, is ready for fleet electrification.

The company expects to sell four million cars worldwide by 2025, and 80% of those will be hybrids or 100% electric. Brazil is included in the bill.

“The Brazilian market is not only the leader in Latin America, but it is also one of the ten largest in the world”, said the Executive, justifying the reason for investing in the country.

Before becoming a luxury car factory, the land in Iracemápolis was a cane field. Mercedes-Benz took over the operations and also created a proving ground.

The German automaker closed its manufacturing activities in the region in December 2020. The factory employed 370 employees and never came close to its maximum production capacity, estimated at 20,000 units per year.

History of Chinese brands in Brazil has ups and downs

The history of cars of Chinese origin in Brazil is full of periods of bonanza interspersed with unfulfilled promises. The first episode is the presentation of Chana’s SUVs in 2006, at the São Paulo Motor Show.

The choice of name was intended to generate jokes and draw attention, which in fact occurred. In 2011, the importing group adopted the original name: Changan.

One of the most important brands in the past decade was JAC Motors, which had 23 thousand cars licensed in 2011. However, the company, which is represented in Brazil by the SHC group, was one of the most affected by the restrictions imposed on imports in September of that year. .

A system of quotas was established for imported vehicles, with a surcharge of 30 percentage points on the IPI (Imposto sobre Produtos Industrializados) to be levied on units that exceeded the ceiling.

The protectionist policy adopted during the Dilma Rousseff (PT) government resulted in the Inovar-Auto stimulus program —​​which, among other results, led Mercedes-Benz to invest in the factory that today belongs to Great Wall.

The plan, which ran from 2012 to 2017, granted tax incentives to companies that invested in technological advancement and local production of vehicles.

In October 2011, businessman Sergio Habib, who commands the SHC group, announced the construction of a factory in Bahia, with an investment of R$ 900 million. Operations were supposed to start in 2015, but the economic crisis and difficulties in raising funds put an end to the venture.

A new announcement was made in December 2017: the new production line would be in the city of Itumbiara (GO), in the same place where the HPE group came to assemble Suzuki Jimny compact utility units between 2013 and 2015.

Again, the business did not take off, and the SHC group asked for judicial recovery. The JAC brand remained in the Brazilian market as an importer and is now betting on electric vehicles. Its products include plug-in rechargeable passenger cars and trucks. The most recent launch is the e-J7 sedan, which costs R$ 259,900.

The most successful Chinese company in the country is Caoa Chery, which has its cars produced in Jacareí (São Paulo countryside) and Anápolis (GO). The automaker faced difficulties in its first phase in Brazil, between 2014 and 2017, but good results began to appear when the doctor and businessman Carlos Alberto de Oliveira Andrade (1943-2021) took over 50% of the operations and renewed the product line. The brand had 39,700 units registered in 2021, ending the year in tenth position.

The good acceptance of Chery models encourages Chinese automakers to bet on Brazil, despite political and economic uncertainties. In addition to the Great Wall, BYD also wants to win over the Brazilian public.

After investing in the local production of electric buses –with a factory in Campinas (São Paulo countryside)–, the company starts importing electric sedans and luxury SUVs. A mid-sized hybrid model is also in the pipeline, with a debut scheduled for 2022.