Chinese industrial group wants engine factory in Brazil

23 February 2006

Sao Paulo, Brazil, 23 Feb – The Chongqing Lifan Industry (Group) has presented an offer to buy the Daimler-Chrysler and BMW engine factory in Brazil, the company said Tuesday.

With around 9,000 workers, the Chinese group, launched in 1992, is the largest private motorcycle manufacturer in China and one of the country’s largest car manufacturers.

The Lifan group, which has 10 factories, in 2004, had sales of over 5.9 billion Reminbis.

The Brazilian factory, which is considered to be one of the most modern in the world, is located in the city of Campo Largo, in the metropolitan region of Curitiba, capital of Paraná state, in South Brazil.

The factory, which cost US$500 million in 1996, uses modern US and German technology to manufacture Tritec 1.6, 16 valve engines.

The aim of the Chinese manufacturer, if its offer is accepted, is to dismantle the factory, transport its components and assemble them again in it industrial district in Chongqing, in Western China.

The Lifan Group plans to transport the factory components over the next two years in order to start engine production in China in 2008.

The Brazilian factory currently produces 250,000 engines per year, namely for BMW’s Mini.

The next generation of engines for the Mini, meanwhile, will be built by France’s PSA Peugeot Citroën, which could lead to the Brazilian factory being deactivated.

With the Daimler-Chrysler and BMW engines, the Chinese Lifan group would increase the competitiveness of its cars on the European, Japanese and US markets, Brazilian analysts have said.

Since last year, the Brazilian unit has provided engines for Chinese manufacturers Lifan, Faw-Hainan (FHAC) and Chery.

The Brazilian unit covers an area of 40,000 square meters and employs 430 workers.

In 2001, Chrysler also closed a unit it operated in the Brazilian city of Campo Largo. (macauhub)