Chinese automaker JAC Motors announced on Friday a new deal with its Brazilian operator SHC Group to build a new factory in Brazil’s northeastern Bahia state, the company’s first outside its home market.
JAC originally intended to invest US$600 million in building a plant in Brazil, but cancelled the project when the government increased taxes on cars with less than two-thirds domestic content, in its effort to protect local jobs.
The agreement with SHC, which currently owns 40 JAC dealerships in the country and aims to raise that number to 200 in the next three years, sidesteps this problem. According to the announcement, only 20% of the $510 million USD investment will be provided by JAC with the rest coming from the SHC Group.
The plant will have an annual capacity of 100,000 vehicles and will be operational by 2014. It isn’t, however, the first factory built by a Chinese carmaker in the world’s fourth largest car market: Geely began work on its own Brazilian plant in July.
Story source: Reuters
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