Chinese automotive group Lifan has decided to take control of its operations in Brazil, which had so far been the responsibility of importing company Effa Motors, which also sells the commercial vehicles of Chinese groups Hafei and Chang, the Brazilian press reported.

According to the Brazilian newspapers, the decision was made because the group’s business in Brazil was not going as well as expected, and the new management structure was put in place in November in order to start immediately improving the point of sale network as well as after sales services.

According to the Chinese group this new phase will require investment of US$150 million to restructure the business and build an engine factory as well as expanding the current production line in San Jose, Uruguay, to manufacture 50,000 vehicles per year.

The current network of 28 showrooms will not change despite the move away from Effa Motors, and the same will be the case for the models currently on sale, the 320, a low cost version of the Mini Cooper, and the 620.

The Chinese group announced that a new model would be launched at the beginning of 2013, a year in which other models will also be launched, although it gave no further details.

Since Lifan entered the Brazilian market in 2010 it has sold around 4,000 vehicles, which the group’s board of directors believes is too few. (macauhub)