CHINA’S GROWING INFLUENCE IN BRAZIL
A deal could clear BYD and Jinjiang from an investigation by labour prosecutors, but they could still face scrutiny from labour inspectors and from federal prosecutors, who have requested the sharing of the evidence so that “measures can be adopted in the criminal sphere”, the statement said.
BYD has been building the factory to produce 150,000 cars initially as part of plans to start production in Brazil, the Chinese EV company’s largest overseas market, in early 2025. Nearly one in five cars BYD sold outside China in the first 11 months of 2024 was in Brazil.
The factory has become an important symbol of China’s growing influence in Brazil, and an example of a closer relationship between both countries. BYD has invested about US$620 million to set up the Bahia factory complex alone.
The reports of irregularities in Bahia could prove to be a major sticking point in their relations.
Brazil has long sought more Chinese investment. But China’s model of taking Chinese workers to the countries where it invests presents a challenge to local job creation, a priority for President Luiz Inacio Lula da Silva.
The investigation also brings unwelcome attention to BYD at a time when it is seeking to expand globally after having gained dominance in China, the world’s largest auto market, where it now takes up more than a third of the market of EVs and plug-in hybrids.
BYD, which is poised to outsell Ford and Honda globally in 2024, has been on an extraordinary expansion this year both at home and abroad, growing capacity and undertaking a massive hiring spree. The company had nearly 1 million employees as of September.
While it still makes more than 90 per cent of its sales in China, BYD has been building passenger vehicle factories in Hungary, Mexico, Thailand, Uzbekistan and Brazil to serve its major overseas markets and increasing investments in marketing abroad.
Jinjiang also does construction for BYD in China, according to records on the Chinese companies information database Tianyancha.
Source: CNA
