Chinese Chery enters Brazilian market
O Estado de S. Paulo
Yesterday Chinese maker Chery showed the SUV Tiggo, the first of four models which the brand intends to sell in Brazil until the end of the year. The company currently has 11 concessionaires all over the Country, a number that is being increase to 30 until September and 55 until December. Sold at R$ 49.9 thousand (US$ 26.3 thousand) with several optional items included, Tiggo is assembled in Uruguay with parts imported from China and will compete for the market with the Ford EcoSport, which starts at R$ 50.7 (US$ 26.7 thousand).
The most ambitious plan of the company, still under study, is the construction of a plant in Brazil, a project that would require investments from US$ 500 million to US$ 700 million. "It will depend on the confirmation that the cost of producing in Brazil remains very close to the cost of production in China", affirmed the Chery CEO in Brazil, Luis Curi.
In the trip President Luiz Inácio Lula da Silva took to China in May, executives of the company confirmed the investment, advancing the plant would have capacity for 150 thousand vehicles per year. The partner of the company in the Country is the Grupo Empresarial JLJ, controller of Nutriplus Alimentação e Tecnologia, headquartered in Salto (SP). The idea would be starting the local operations in 2012. Curi admitted it is a challenge to get to a formula that makes the production in Brazil as financially advantageous as the production in the Asian country. But he emphasized that "Brazil is one of the few growing markets in the world and it is among the largest in the international ranking, therefore it is interesting to be present herer, either as an importer or as producer". Altogether, the company expects to sell 4.5 thousand vehicles this year and 10 thousand in 2010.
For the beginning of the operations in Brazil, Chery is investing US$ 35 million. This value includes the implementation of the network of dealerships, the import of cars, advertising campaign and the launching of Tiggo. Founded in 1997, Chery has 15 plants in 11 countries and an annual productive capacity for 650 thousand cars, 650 thousand engines and 400 thousand gearboxes.