With the support from Investe SP, Chery opens new automotive and engine plant in Jacareí and announces future R&D center in Brazil

Investment project of R$ 1.2 billion has been fully assisted by Investe SP since 2009; Company announced the construction of R&D Center

On August 28, Chery Brazil opened its first Brazilian plant in Jacareí, 85 km from the state capital. In total, R$ 900 million was invested in an automotive plant and R$ 300 million in a plant dedicated to the production of engines of Acteco brand, also from the Chery group. By the end of 2014, the company should have 500 employees hired for the automotive plant, 300 of which have already been hired. Acteco, on the other hand, has 30 employees and is expected to reach 100 by the end of the year.
“We have the commitment to support those who invest in São Paulo. For this reason, I would like to thank Investe SP, which together with the municipal and federal agencies assisted in the installation of Chery’s plant,” said the governor Geraldo Alckmin, who attended the event.

The company has been receiving full support from Investe SP, the investment promotion agency of the state, associated with the Department of Economic Development, Science, Technology and Innovation, since 2009. The agency has been providing environmental, tax and infrastructure advice to Chery.

“This is one of our first projects. It took five years from the first meeting to the opening. We are very happy and proud not only for the realization of the investment, but for what it means, which is the generation of jobs for more than 3000 families, increasing the income of the local population and strengthening the industry, not only in Jacareí, but in Vale do Paraíba,” said the president of Investe SP, Luciano Almeida.

In addition to opening the two plants, the executives of Chery also announced the construction of a research and development center of the brand in Brazil, which will receive R$ 50 million in investments. The idea is to create a vehicle produced specifically for the Brazilian market.

“Here in Brazil we will also have the R&D, industrial and accessories center,” said the vice president of Chery Group, Zhou Biren.

At the moment, the company is seeking technological centers and universities to partner. It has already has agreements negotiated with FGV, Faap, Univap, Unip and Anhanguera, in addition to technological parks in Jacareí and São José dos Campos. The location of this new investment is not defined yet.

According to Roger Peng, president of Chery Brazil, the automotive plant in Jacareí will be the company’s headquarters in Latin America, because the Brazilian market is the company’s priority. “Brazil is the fourth automotive market in the world and the largest in Latin America. It has been a few years that we are working to adapt our production to the domestic market and the taste of Brazilians,” said Peng.

Built on an area covering more than one million square meters, the plant has 400,000 square meters and three production facilities: assembly, welding and painting, in addition to the administration and restaurant buildings. The complex also includes a testing area.

The machinery is imported from Germany, Spain, USA and China, with installation of a fully robotic painting process. It is estimated that 50,000 vehicles are produced in the first year, but the plant will have a capacity to produce up to 150,000. The engine plant will initially supply the tailored production of Chery, but the company also has ambitions to attract new customers.
“Chinese people only invest when they are sure of what will happen. And this investment made by Chery shows the confidence of Chinese businessmen in the future of Brazil,” said the Vice President of Brazil, Michel Temer. Along with him, the event was also attended by the mayor of Jacareí, Hamilton Mota; China’s ambassador in Brazil, Li Zinzhang; and the state and federal deputies, secretaries and local authorities.

The pre-series of hatchback and sedan models of Celer begin to be produced in September, but the total production to supply of car dealers begins in December. The goal is to reach the end of 2014 with 100 dealerships in the country.

The QQ model will be produced in the second quarter of 2015, undergoing a layout modification and featuring a three-cylinder flex engine. The following year begins the production of an SUV, along with the export of models produced in Jacareí. Thus, the three nationalized models, SUV, QQ and Celer will supply dealers from Argentina, Uruguay, Colombia, Ecuador, Venezuela and Peru.

The production of Celer will start with a rate of domestic content of 50%, through products from suppliers such as Metagal, Pirelli, Moura, Bosch, HVCC, Tyco, Johnson Controls, Goodyear, Basf, Petronas, among others. The location of the automotive plant relied on the support of Investe São Paulo, as for the decision regarding the location of the engine plant, the requirement was that it should be no further than 100 km from Chery in Jacareí.

“We are honored to say that we are the first Chinese automotive industry to settle in Brazil,” celebrated the vice president of Chery Brazil, Luis Cury.

This rate of domestic content will be gradually increased over the next two years, when Acteco will also manufacture transmissions and this value could reach 70%.

In total, 8,000 Chery vehicles were sold in 2013. With the new plant, sales are expected to reach 15,000. The company’s market share, currently at 0.25%, is estimated to reach 3% in 2018, once the plant in Jacareí operates at its maximum capacity.

As for the sales, it is estimated that the automotive plant reports R$ 5 billion still this year, while Acteco should generate R$ 200 million.

About Chery

Chery was founded in 1997, and 15 years later, it became the largest independent automaker from China. Currently, with 21 vehicle models from 11 series available for the domestic and foreign markets, Chery has 24,000 employees and a production capacity of 900,000 vehicles, 900,000 engines and 800,000 transmissions per year. Its headquarters is located in the city of Wuhu, Anhui province in China.

In the Brazilian market, the company debuted in August 2009, with the SUV Tiggo. Today, the automaker also sells QQ, Face and Celer models, in addition to the automatic version of Tiggo, the first Chinese vehicle to rely on this type of transmission in the country. Currently, Chery has 67 dealerships located throughout the country. By the end of the year, this number could reach 100.

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