South America, and more specifically Brazil, did not become one of the world’s top automotive producers by chance.
International market access, lower labor costs, established supply chains and government incentives represent just a few factors that have led automotive giants such as Honda, Stellantis, General Motors, Toyota and Volkswagen to the continent.
According to a report by Mordor Intelligence, the South American automotive market, largely supported by activity in Brazil, Argentina and Chile, is expected to be worth $24.88 billion in 2024, scaling to nearly $37 billion by 2029. This jump can be attributed to growth within the EV sector, which industry leaders have put at the top of their agendas.
Great Wall Motors Pushes Forward
The Brazilian Senate approved its Mover Program in June 2024. This program centers around green mobility and innovation for the country’s automotive industry, aiming to promote EV and hybrid manufacturing. Mover creates the framework for Brazil officials to create incentives and a national fund for development of infrastructure for automakers over the next four years.
Last May, China-based automotive manufacturer Great Wall Motors announced plans to open a new factory dedicated to EVs, hybrid and hydrogen-fueled vehicles. The project would take place at the former Mercedez-Benz manufacturing facility, which Great Wall Motors acquired in 2021. In May 2024, the plant was to begin production with a capacity of 100,000 EVs per year and 2,400 new jobs at the Iracemápolis site in the state of São Paulo, Brazil.
When the anticipated opening date approached, the company pushed back the plant’s opening to later in 2024. This move was in response to the return of the import tax on EV and hybrid vehicles and the potential impact of the Mover Program, according to the company. Once operational, Great Wall Motors will begin production with an SUV from its Haval line, later moving to manufacture a new electric pickup truck.
Stellantis Goes Hybrid
With $5.9 billion in tow, Stellantis marked its largest investment to date in South America in March 2024 at its site in Betim, Brazil. Fresh funding will support a planned 40 new products, integration and production of decarbonization technologies and plenty of new jobs.
“This announcement solidifies our trust and commitment in the future of the South American automotive industry and is a response to the favorable business environment here,” said Stellantis CEO Carlos Tavares. “As a critical part of our ‘third engine’ growth strategy, South America will take a leading role in accelerating the decarbonization of mobility together with our employees, our supply chain network and our partners.”
The site will gain new Bio-Hybrid technologies — Bio-Hybrid electrified dual-clutch transmissions, Bio-Hybrid Plug-In and Battery Electric Vehicle (BEV) — that will be used to manufacture a number of Stellantis models by the end of this year, including a new EV. This move looks to boost the company’s role in Brazil, where it currently holds 31% of the market share.
