Chinese self-owned brands began entering the market of South America

By Jeff Lee / Mike Song 2022-12-05

The car market of South America has never been the main sales target of major carmakers; However, there are lots of carmakers that establish manufacturing plants in Mexico to take advantage of geographical proximity to supply the demand of the car market in North America. Now, Chinese self-owned brands began directly entering the core of South America – Brazil to build BEV assembly plants, which shows they are more ambitious than other major traditional carmakers. It’s foreseeable that after 5 years, the car market leader of South America will no longer be the brands from Japan, Germany, or USA.

BYD, the top-selling brand of electric vehicles (BEV+PHEV) worldwide this year, had produced their three-millionth BEV in the middle of November. BYD spent 13 years to produce their one-millionth BEV since the beginning of entering BEV industry in 2008; But they just spent 1 year to produce another 1 million units; Moreover, BYD only spent 6 months to produce another 1 million units. BYD became the second miracle in the history of BEVs (no doubt the first one is Tesla) within the past 2 years. Now, BYD had already stepped out of China to challenge the global car market; The way they deploy the market is so fast and extensive that had stunned major carmakers. The latest news is that BYD will acquire the Ford manufacturing plant located in Brazil that halted the operation last year. Actually, BYD already established the electric bus manufacturing plant in Brazil in 2015, and later they established the LFP power battery manufacturing plant, but in small operations; This time, BYD invests almost 600 million USD to enter the passenger car assembly industry in South America, which shows the competitiveness of BYD has become top-notch level among global carmakers, and they will play an key role in the global car market in the upcoming years. Before the start of local CKD operation of passenger vehicles, BYD had also begun the deployment of CBU operation in South American region, while retail network is well-planned for rapid expansion. In addition, Chinese self-owned brands such as Chery Automobile, Great Wall, Zotye, etc., also have whole-vehicle assembly operations in South America; However, when the global 1st EV brand – BYD is marching toward Brazilian market, the omen of the disruption of global car market is on the way to us… 

 

  • The South American car market has always been dominated by Toyota, Volkswagen, General Motors, and Stellantis Group; Although its scale (about 2,000,000 units per year) can’t be compared with other advanced countries or Southeast Asian region, but it can be regarded as the “backyard” of USA in Political or Economic aspects. At the moment that the era of EV comes, South American giants such as Brazil, Argentina are also actively promoting the market and industry of EVs. Either the withdrawal of manufacturing operation of Ford last year, or the takeover and transformation by BYD to start producing BEVs, both indicate the on-going power transfer among the major carmakers.
  • Before the Brazilian plant, BYD already have Thailand plant and India plant in the overseas deployment of manufacturing plants outside China market, which directly entered the two major markets – Southeast Asia and India. With the Brazilian plant this time, BYD confidently shows that excluding Europe, USA, Japan, all the other regions are the next targets to conquer. While deploying target markets like these, Chinese self-owned brands will impact Japanese carmakers the most in the future.
  • I predict that within the upcoming 2 years, as Chinese self-owned brands begin delivering better result of sales in Europe, they will begin planning to build whole-vehicle assembly plant in Europe, likely in Eastern Europe in lower cost basis. That is to say, not only Japanese brands, but also German brands will face direct challenges from Chinese self-owned brands’ BEVs in major markets around the world (excluding USA).

When the game rules of the automotive industry are changed by new technologies in the future, it brings revolutionary business opportunities for many ICT industry, startup companies, and carmakers who are eager for transformation around the world. Tesla and BYD seized it, and there are many Chinese self-owned brands and Southeast Asian industry also want to seize this rare opportunity. Moreover, Taiwan already owned high-quality ICT industry and automotive supply chain, so the authorities are undoubtedly responsible to lead for the strategic planning to seize the business opportunities with our own core competitiveness!