In meeting with Lula, Stellantis CEO announces BRL 30 billion in investments in Brazil

Stellantis has announced a record investment plan for South America following a meeting between Brazil’s President Luiz Inácio Lula da Silva and company CEO and global Executive Director Carlos Tavares on Wednesday, March 6. The meeting was held at the Planalto Palace in Brasília. Adding up to a total BRL 30 billion between 2025 and 2030, this is the largest investment in the history of the Brazilian and South American automotive industry.

Brazil and Argentina harbor most of the factories belonging to Stellantis, which is owner of the Citroën, Fiat, Jeep and Peugeot brands. The announced investments will drive the launch of 40 new products over the period, as well as the development of innovative decarbonization technologies across the automotive supply chain and new strategic business opportunities.

Bio-Hybrid technology, which combines electrification with flex engines powered by biofuels (ethanol) at three different levels, is one of the trailblazers in this investment. The Stellantis Automotive Hub in Betim (in the Brazilian state of Minas Gerais) is the company's global center for technology development, advancing its legacy of innovation. New hybrid technologies will begin to be available by the end of 2024.

To Carlos Tavares, the announcement “strengthens our confidence and commitment to the future of the South American automotive industry, and is a response to the favorable business environment we are finding here”. The Stellantis CEO reiterated that South America is a fundamental part of the industry's growth strategy. The region “will take a leading role in accelerating the decarbonization of mobility,” highlighted Tavares.

SECTOR IS ON THE RISE — On Tuesday (5), Toyota in Brazil publicly announced BRL 11 billion in investments by 2030. Based on this announcement, private investment in the automobile sector in Brazil over the coming years will reach BRL 65 billion when added to sums ​​announced by other automakers such as General Motors, BYD and Hyundai.

Private investments in the automotive sector / Source: MDIC

Last month, Volkswagen announced an investment of over BRL 9 billion in Brazil by 2028, with focus on decarbonization, to launch 16 new vehicles, including hybrid, 100% electric and full flex models. Initially, the new investment includes the development and production of innovative projects for the company's four factories in Brazil.

In the second semester of 2023, BYD announced that it was working on the installation of three new manufacturing units in Camaçari (in the state of Bahia) to produce electric trucks, electric and hybrid cars and bus chassis, adding up to BRL 3 billion in investments. Brazil is the first country to harbor a Chinese company car factory outside Asia.

The investments are connected to reindustrialization initiatives that have guided the Brazilian Federal Government's management, such as Nova Indústria Brasil, Mover and Novo PAC programs.

CAR SALES — A balance carried out by Brazil’s National Association of Motor Vehicle Manufacturers (Associação Nacional dos Fabricantes de Veículos Automotores/Anfavea) reveals that the number of cars sold in Brazil in January this year was 13% higher than in the same period of 2023. Altogether, 162 thousand were sold in the first month of 2024, compared to 143 thousand in January 2023.

INCENTIVE — Last year, the Federal Government advanced a temporary program to contribute tax credits towards reducing car prices and encouraging renewal of truck and bus fleets. The measure provided BRL 1.5 billion to subsidize consumer discounts. More than 125 thousand vehicles were sold and, on June 30, Brazil registered a historic record of 27 thousand new license plates in one single day.