Localization helps Chinese carmakers thrive in LatAm

RIO DE JANEIRO - "Locals make up about 70 percent of our employees, and we are expanding presence along the industrial chain to become more localized," said Peng Jian, general manager of Chinese carmaker Chery in Brazil.

Chery opened its first wholly owned plant overseas last August in Jacarei, in the state of Sao Paulo, Brazil, in a landmark step in its global strategy.

The Chery subsidiary, with a total investment of $400 million, produces cars and engines. Geared to full capacity after the completion of phase 2, the plant will be able to produce 150,000 cars per year, tripling the present capacity. The project will create 3,000 jobs, as much as 90 percent of which will go to Brazilians, said Chery.

Chery has also set up 75 car sales and service centers in Brazil in addition to a research center to be built with an input of $22.3 million.

Localization is making Chinese carmaker pioneers thrive in production capacity cooperation between China and Latin America.

Brazil, as the world's fourth-largest automobile market and the sixth-largest auto manufacturer, has attracted the General Motors of the Unites States, among other carmakers, to come and open plants.

Chery, founded in 1997, exported 110,000 units last year, marking its 12th consecutive year as China's biggest exporter.

"Chery and many other leading Chinese companies are enlarging their investment in Brazil in line with their optimism about the latter's economic growth and confidence in bilateral cooperation," Chinese Ambassador to Brazil Li Jinzhang noted.

During his ongoing four-nation tour to Brazil, Colombia, Peru and Chile, Chinese Premier Li Keqiang has signed a series of agreements to boost production capacity cooperation with Latin America.

Collaboration in the auto industry is one of the fields highlighted in the deals.

Data show that among the 51 car brands on the Brazilian market, 12 are from China, including Chery, JAC, Geely and Lifan. And Chinese carmakers are increasing their presence in other Latin American countries as well.

Chinese bus maker Yutong is expected to open a plant in Venezuela in October, with an assembly capacity of 3,500 units a year, as part of the Venezuelan government's efforts to improve nationwide transportation.

Now used in at least 90 Venezuelan cities, an estimated 2,400 Yutong buses are carrying 2 million people every day.