China's GWM to Produce SUVs and Pickup Trucks in Brazil Starting 2023

[Asia Economy Reporter Hwang Yoon-joo] Chinese automaker Great Wall Motors (GWM), which acquired the Mercedes-Benz factory in Brazil, is expected to start production in early 2023.

According to Yonhap News on the 25th, GWM announced that it has nearly completed the legal procedures for acquiring the Mercedes-Benz factory. Once the production line is established, it plans to manufacture sport utility vehicles (SUVs) and pickup trucks.

Last month, GWM signed a contract to acquire the Mercedes-Benz factory located in Iracemapolis, an inland city in S?o Paulo state. The acquisition amount was not disclosed.

GWM has been pursuing entry into the Brazilian market for the past 10 years with the goal of targeting the South American market, including Brazil, and has succeeded in acquiring the Mercedes-Benz factory. GWM announced that it will invest 4 billion Brazilian reais (approximately 875 billion KRW) over five years to increase annual production capacity from 20,000 units to 100,000 units, a fivefold increase, and employ 2,000 people.

With GWM's entry, competition in Brazil's SUV and pickup truck market is expected to intensify. As of the first half of this year, SUVs and pickup trucks accounted for 31.7% of the Brazilian automobile sales market, and this is projected to rise to 46% in four years.

Hyundai Motor Company's strong performance in the Brazilian SUV market stands out. Hyundai launched the small SUV model Creta in early 2017, and within about four years, it became one of the most popular models. Approximately 90% of Creta's production is sold in the Brazilian market, with the remainder exported to Paraguay, Uruguay, Colombia, and Argentina.