China's automaker Chery hopes to expand production in Brazilian market

China's automaker Chery hopes to produce 10,000 vehicles in its Brazilian factory this year, and soon expand its production and presence in the country, a top Chery executive said.

Peng Jian, Chery's president for Brazil, said Chery is working hard to offer new options for Brazilian consumers. Although Chinese manufacturers have been operating in Brazil for some years, consumers remain relatively unaccustomed to Chinese vehicles, and much more used to the four big players in Brazil: Volkswagen, GM, Ford and Fiat.

At a time when the automotive industry in Brazil is facing a crisis, with both production and sales down, and other car manufacturers are laying off hundreds of qualified workers, Chery is investing in the expansion of its operations, which puts the company in the spotlight of the auto sector.

It was announced earlier this week that vehicle sales in the country dropped 23.9 percent in the first half of the year and are expected to fall 23 percent in 2015.

Chery started operating in Brazil in 2009, importing the QQ, Tiggo and Celer models. Soon after, the company announced its intention to open a local factory, with investments of half a billion U.S. dollars.

The chosen location was Jacarei, a town of some 200,000 inhabitants located in Sao Paulo State, which boasts the majority of car factories in Brazil, and also a good share of qualified personnel for the sector.

The factory was inaugurated in August 2014 and started producing the Celer model, the first vehicle made by a Chinese manufacturer in Brazil.

The model made some changes from the imported version, such as the shifting gear, indicating Chery's willingness to adjust to the local market and build a stronger presence in the country.

According to Peng, current production is focused on the two versions of the Celer (hatch and sedan), but the Jacarei unit will start producing new versions of the QQ and Tiggo models as well. That means Chery will compete in several categories in Brazil: compact cars, sedans and SUVs.

Besides Brazil, Chery will also sell its vehicles to other South American nations like Uruguay and Argentina.

During Chinese Premier Li Keqiang's visit to Brazil in May, Chery announced a bold move and major investment in the country: the construction of a giant industrial park around the Jacarei factory.

The 4.5-million-square-meter area will feature 25 businesses, such as warehouses, logistics companies, maintenance, services and components companies, Peng said. Investments were estimated at 700 million dollars.

The park will help make Chery's cars more affordable to Brazilian consumers, as more components will be produced locally and the company will make use of nearby warehouses and other facilities.

The companies in the park will serve not only Chery, but other businesses as well, which will boost the local economy and create jobs.

Chery is not the only Chinese manufacturer interested in producing cars in Brazil. JAC, for example, another Chinese car maker, sells several models imported abroad in the country, and is building a factory in Camacari, Bahia State, which is expected to be operational next year.