Chinese company and state government hold party to celebrate R$3bn investment, but talks with Ford are not concluded
07/05/2023
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2023/L/g/APK5jeQAyrGrdISuL3yQ/05emp-100-byd-b2-img01.jpg)
Stella Li — Foto: Divulgação
The factory of the Chinese car manufacturer BYD in Bahia still does not have an address. From the official announcement made Tuesday in Salvador, it is only known that it will be in Camaçari. There is an old Ford factory for sale in this city, and the Chinese company is interested in buying it. Bahia Governor Jerônimo Rodrigues promised that if Ford and BYD do not reach an agreement in these negotiations, which have been going on for months, he will find another location in the same city.
The efforts of the governor of Bahia will pay off. On Tuesday, the Chinese company confirmed an initial investment of R$3 billion to employ 1,000 people and produce 150,000 vehicles per year in the first phase. Over time, according to the company’s executive vice president, Stella Li, there will be 5,000 employees.
Ms. Li, who also heads BYD’s operations in the Americas, stood out at the party the state government prepared for the announcement. When the first local music groups took the stage, she kept up with the rhythm by clapping and tapping her feet on the floor. Gradually she loosened up. She even played with the Ilê Aiyê group and followed perfectly the choreography of the Bahian dancers when Olodum came on stage. The Chinese executive also put Senhor do Bonfim ribbons on her wrist.
Since the address of the factory had not yet been determined, the party was held at Farol da Barra, where the Chinese brand’s vehicles were on display. In her speech, Ms. Li said BYD will make cars, buses, and electric trucks in the future. She also promised to produce affordable electric cars in the country and to turn Bahia into an “innovation hub.” Production is scheduled to begin in the last quarter of 2024.
According to the governor, the cooperation document signed with BYD also provides for “research and production of minerals” in the state. Ores such as lithium are key for battery production. BYD’s investment in Bahia will be part of a state incentive program that includes a 95% reduction in the ICMS tax until 2032.
In an interview in Salvador shortly after the investment announcement, BYD’s advisor in Brazil, Alexandre Baldy, said that “there are no obstacles” in the Chinese company’s negotiations to buy Ford’s plant.
“What exists are negotiations between two companies that are multinationals,” said Mr. Baldy, who stood next to Ms. Li when the company’s management team was asked by reporters about what is holding up the conclusion of the purchase of the plant owned by the U.S. automaker.
According to Mr. Baldy, “in a few days,” probably in Camaçari, the second phase of the announcement will take place, which will bring the information about the exact address of BYD’s future plant in Brazil.
In the same interview, Bahia Governor Jerônimo Rodrigues also talked about the negotiations to hand over to BYD the port that belonged to Ford. Located in Aratu bay, in Candeias, the port was built by the Bahia government exclusively for Ford, which closed its plant in Camaçari in 2021.
The company is also waiting for the government’s position on federal incentives. Last week, Ms. Li and Mr. Rodrigues met with President Luiz Inácio Lula da Silva.
In São Paulo Tuesday, the National Federation of Vehicle Distribution (Fenabrave), which represents dealers, celebrated the result of tax breaks granted by the federal government to increase sales of cars up to R$120,000. The benefit amounted to R$800 million, which was converted into discounts for consumers.
In June, 179,600 cars and light commercial vehicles were sold, an increase of 8.6% compared to the same month last year. In the first half of the year, the growth was 9.76%, to 934,500 units. Considering trucks and buses, the market in June totaled 189,500 vehicles, an increase of 6.46% compared to the same month last year. In the first half of the year, the total of 998,200 units represented an increase of 8.7%.
With the end of tax breaks, Fenabrave announced that it intends to submit a plan to the government, which, according to the trade association’s president, Andreta Jr., will bring “a solution for the industry to growth steadily without making the government lose revenues.”
*Por Marli Olmos — São Paulo
Source: Valor International