BAIC Plans to Produce Electric Vehicles in Brazil, Discarding CKD Process

The Chinese automaker BAIC has made significant strides in its plans to produce electric vehicles in Brazil. According to Oswaldo Ramos, COO of BAIC in Brazil, the company has chosen a location for its production facility and has partnered with a truck manufacturer.

In an interview with Automotive Business, Ramos revealed that BAIC will discard the CKD (Complete Knock Down) and SKD (Semi-Knock Down) processes, which have become unpopular in the Brazilian automotive sector. Instead, the company will follow the GWM's 'piece by piece' importation process, where each component is imported separately and assembled in Brazil.

This decision was made due to the high importation tax, which makes the CKD and SKD processes less viable in the long term. By importing components separately, BAIC can avoid paying the importation tax on the entire vehicle, making it a more cost-effective option.

BAIC will have the support of another company in the group, which will provide assistance in implementing the 'piece by piece' process. The company's Brazilian operation will utilize the center of distribution of parts of Foton in São Paulo, as the brand belongs to the same group.

Ramos stated that the company's matrix is evaluating the investment value that will be made in Brazil. However, the partnership with the truck manufacturer will be limited to the sharing of the center of distribution of parts, as the company makes its vehicles in Agrale, in Caxias do Sul-RS.

The COO also mentioned that the Chinese representatives have all the information about the locations for buying or leasing in the country. He pointed out that it makes more sense to associate with a partner who already has a ready and operational structure.

BAIC may close a partnership with the PACE of Ceará or HPE, which is looking for a second partner.

## BAIC's Plans for Electric Vehicle Production in Brazil

BAIC's decision to discard the CKD and SKD processes and follow the GWM's 'piece by piece' importation process is a significant move in the Brazilian automotive sector. By avoiding the high importation tax, BAIC can make electric vehicles more affordable for Brazilian consumers.

The company's partnership with a truck manufacturer and its use of the Foton center of distribution of parts in São Paulo demonstrate its commitment to establishing a strong presence in the Brazilian market.

## The Future of Electric Vehicle Production in Brazil

The production of electric vehicles in Brazil is a growing trend, with several companies investing in the sector. BAIC's decision to follow the GWM's 'piece by piece' importation process is a significant development in this trend.

As the demand for electric vehicles continues to grow, it will be interesting to see how BAIC's plans unfold and how the company will compete in the Brazilian market.

## Comparable Figures

| | CKD | SKD | Piece by Piece | | --- | --- | --- | --- | | Importation Tax | High | High | Low | | Cost-Effectiveness | Low | Low | High | | Production Process | Assembled in Brazil | Semi-assembled in Brazil | Imported separately and assembled in Brazil |