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Brazil is becoming the stage for a battle between automotive giants and Chinese powers. With billions in investments and market transformations, the country is shaping the future of the global car industry. Are we ready to lead?
The world's automotive industry has never been so busy. Between crises at major traditional automakers and the impressive rise of Chinese brands, Brazil is emerging as a true game-changer where this dispute is being fought.
But what is at stake, after all? How are the decisions made here shaping the future of cars around the world? The answer involves billions of dollars, electric cars and a profound transformation in the market.
The global scenario: crisis and reinvention in car manufacturers
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According to the channel InvestNews BR, the crisis affecting large car manufacturers such as Stellantis and Volkswagen is not just local, but global.
Both face stagnant sales, rising costs and difficulties in keeping up with technological advances, especially in the electric vehicle sector.
These challenges put pressure on giants to seek alternatives to remain relevant.
Stellantis, for example, emerged in 2021 from the merger between Fiat Chrysler and PSA Peugeot.
As highlighted by InvestNews BR, the idea was to reduce costs by sharing components between the group's brands and accelerate the electrification of its fleet.
However, the pandemic disrupted production chains, and the company still deals with a limited portfolio of electric cars.
Despite investments, global demand for electric vehicles has not grown at the expected rate, creating an environment of pressure and adjustments.
Volkswagen, which is also facing similar challenges, announced a $5 billion investment in Rivian, an American automaker specializing in electric vehicles, to improve its software technology and vehicle architecture.
However, competition from Chinese automakers remains intense, especially in Volkswagen's largest market, China, where the company lost its leadership to BYD in 2023.
Chinese dominance in the automotive sector
According to InvestNews BR, China not only dominates global electric car production, but has also become the world's largest exporter of vehicles, surpassing Japan and Germany.
This success is the result of a decades-long plan, driven by the Chinese government, which secured the entire production chain in the country – from programmers and factories to batteries and logistics.
Chinese competitiveness is also evidenced by the advance of BYD, which produces up to 80% of its car components domestically, and CATL, a global leader in batteries for electric vehicles, which even supplies competitors such as Tesla, BMW and Volkswagen.
This dominance generated protectionist reactions in markets such as the United States and Europe, which imposed additional tariffs to contain Chinese advance.
Brazil at the center of the dispute
With around two million cars sold annually, the Brazilian automotive market is strategic for automakers.
As pointed out by InvestNews BR, While global car sales are falling, Brazil continues to grow, even with the elimination of the popular car and a low electrification rate.
The entry of Chinese brands such as BYD and GWM into Brazil is transforming the market.
At the same time, the government reintroduced import taxes on electric vehicles, but created tax incentives for automakers that invest in sustainable technologies.
This strategy has attracted billions in investment.
According to InvestNews BR, Companies such as Stellantis, Volkswagen, Toyota and GM have promised to invest more than R$100 billion in Brazil by 2030.
These resources not only aim to strengthen their local presence, but also to use the country as a base to serve other Latin American markets.
An opportunity for Brazil?
The dispute between traditional and Chinese automakers puts Brazil in a privileged position.
With significant investments in factories and infrastructure, the country can consolidate itself as an important hub in the global automotive industry.
However, it remains to be seen whether these promises will be fulfilled and how local and foreign brands will respond to market changes.
Do you believe that Brazil is ready to lead the future of the global automotive industry? Share your opinion in the comments!
Traditional car manufacturers without planning will become extinct, because nothing lasts forever and VW had this experience in China when manufacturing the Santana car, right?
Only hybrids or plug-in hybrids will be “sticky”. Brazil does not have refueling points for long journeys. They are still very expensive for the less affluent classes. In short, electric cars are only for cities.
All car manufacturers in Brazil today are not preparing for the future, a future of electric cars, betting on hybrids. Since there is a deadline for the elimination of combustion cars in Brazil, car manufacturers are ignoring this deadline. And let's do an analysis: today they say that biodiesel alcohol is sustainable, but it is not! In the production of both fuels, it is necessary to prepare the land for production, plowing the land. This uses fuel and engine oil from petroleum. The next step is to have all the machinery for planting the seeds or seedlings. Soon after, there is the collection and transportation of sugarcane, soybeans, corn or other types of raw materials for the production of fuels. In the industrial production part, we have the transformation of raw materials into fuels, with the expenditure of energy for this transformation, which has a share in environmental warming. In the final stage, we have the transportation and sale to the end consumer.
Well, this is the saga of so-called sustainable fuels. In the case of electric vehicles.
We have batteries and an electric motor that does not require any petroleum-derived products or biofuels.
We need support in supplying these to roads and cities. And as happened with PET bottles and aluminum cans, which were an environmental problem, today we are a reference in recycling and reverse logistics. We cannot forget that we have an inexhaustible source of energy, which is solar energy!