China's JAC motors to build factory in Brazil, hoping to avoid higher import taxes

Sunday, October 9th 2011 - 09:56 UTC

Full article 5 comments

The factory should be operational by 2014

Chinese automaker JAC Motors announced Friday it will invest 500 million dollars to build a factory in Brazil's north-eastern Bahia state its first outside China.

The factory, slated to open in 2014, will have the capacity to produce 100.000 units, Jianghuai Automobile Co. said in a statement. A total of 3.500 jobs are expected to be created.

The investment will be made by the parent company in China together with the SHC Group, which represents its business interests in Brazil.

In August, the company put the preliminary value of its investment at 900 million dollars.

The deal had been called into question when the Brazilian government decided to raise taxes on imported vehicles not built with at least 65% of the parts made in Brazil or coming from Mercosur countries.

The decision was aimed at blocking a flood of Chinese automobiles into Brazil, now the world's number four car market. It means JAC Motors will have to pay higher taxes until its Brazilian factory is operational.

Sergio Habib, president of JAC Brazil operations, said he hoped Brasilia would reconsider the higher taxes now that JAC investment plans are confirmed.

JAC has entered the Brazilian car market with competitive prices compared to offerings from industry heavyweights General Motors, Volkswagen, Fiat and Ford.

Categories: Economy, Investments, Brazil.

Tags: Brazil, car makers, China, JAC Motors, Mercosur.

Top Comments

Disclaimer & comment rules

GeoffWard2
Do NOT 'reconsider' the import tax for this company, just because it has chosen to do what you want, invest in the country.

There are many other sectors where China etc are still dumping goods and destroying home industries.
The bigger issue remains this dominant one and Brasil's policy, once chosen, must be managed even-handedly until this dumping of the whole range of too-cheap imports stops.
Oct 09th, 2011 - 01:25 pm 0
briton
so to save on import tax,
they use their brains, and make them in brazil, and send the profits back to china,
Oct 09th, 2011 - 03:08 pm 0
Dave204
Just curious, do any of you actually own one of these cars? What are they like?
Oct 10th, 2011 - 05:02 am 0

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