GWM to open factory in Brazil in May 2025 (2025)

GWM has also begun hiring its first employees. With the factory’s opening date, manufacturing process, and personnel selection defined, the facility—purchased from Mercedes-Benz in mid-2021—has started buzzing with activity. It had been largely dormant until now, marking GWM’s entry into Brazil’s automotive industry.

The first phase of recruitment involves hiring 100 people—30 for the administrative team in São Paulo and 70 for the factory. The local population of Iracemápolis, a small town about 150 kilometers from São Paulo, is celebrating once again after the disappointment of Mercedes closing the same factory in early 2021.

While some of the new hires previously worked at Mercedes, that experience isn’t a hiring requirement, said Ricardo Bastos, GWM Brazil’s director of institutional affairs. The first employees will take on leadership roles in production processes, assembly line management, and training.

In early 2025, the Senai technical school in Iracemápolis, built when Mercedes set up shop in the town, will help train the workers. Mr. Bastos said the company aims to create 700 jobs once the factory becomes operational.

One reason GWM abandoned its initial plan to begin production using the CKD (complete knock-down) process, which involves importing component kits, was that it already had a high-quality paint shop—a legacy from Mercedes. When components like body panels are imported as kits, they typically arrive pre-painted.

However, the primary driver behind the shift in strategy was the Mover program (Green Mobility and Innovation), which offers tax reductions to automotive companies based on factors such as the level of local content in their products, vehicle emissions, and investments in research and development, among others.

GWM has plans to export its vehicles, but to do so, it needs to meet a minimum local content requirement of 40%. Mr. Bastos said the company is targeting 60% local content to begin exports around 2028. By then, GWM will need to rely on a robust local supply chain.

Mr. Bastos also noted the factory’s strategic location. Iracemápolis is in a region that already has a network of parts suppliers serving other automakers. It’s just 65 kilometers from Honda’s plant in Itirapina and 30 kilometers from Hyundai’s facility in Piracicaba.

In addition to scrapping its CKD production plan, GWM has also revised its choice of the first model to be produced in Brazil. Initially, the company planned to start by launching a hybrid pickup truck called the Proer. But that plan was reconsidered after the Brazilian government announced late last year that it would gradually increase the import tax on electric and hybrid vehicles.

GWM will now kick off production in Brazil with its best-selling model, the Haval H6. This SUV was the first plug-in hybrid project registered with the Mover program for production in Brazil.

“Given the country’s public policies, we decided to start production with a car that we’re already selling in high volumes,” Mr. Bastos said. With rising import taxes, the Haval would lose market share if it continued to be imported.

From January to September, 15,800 units of the Haval were sold, making it the 30th best-selling car in Brazil, according to vehicle registration data from Fenabrave, the national dealers’ association. GWM ranks 13th in the overall car market for the year.

GWM plans to produce 25,000 units of the Haval annually. “The factory is licensed for a total capacity of 50,000 units,” said Mr. Bastos, suggesting that the Chinese automaker has already included another model in its production plans. When it was owned by Mercedes, the factory had a capacity of 20,000 vehicles per year.

In its initial phase, GWM’s hybrid vehicle will only be fueled by gasoline. “But we’ve already signed a contract with Bosch to develop a hybrid system that runs on ethanol,” Mr. Bastos added.

The Brazilian plant will be GWM’s first in the West and third outside China. Founded 40 years ago, the group has two other plants abroad—one in Russia and another in Thailand. GWM, which is entirely privately owned, is the largest private automaker in China.

One notable feature of GWM’s strategy is its decision to quickly establish a leadership team made up of Brazilians, all with extensive experience in the automotive sector.

Before joining GWM, Mr. Bastos was a director at Toyota and played a significant role in government relations, participating in discussions that led to the reduction of import taxes on hybrid vehicles and exemptions for electric cars between 2015 and 2016.

Another recent hire is Diego Fernandes, who worked for 27 years at Honda and will now oversee GWM’s commercial and operational areas. Joining them is Marcio Alfonso, with over 40 years of industry experience and formerly a senior executive at CAOA, who now serves as GWM’s director of engineering, research, development, and innovation.

The team taught their Chinese counterparts that Brazilians prefer cars with power and firmer suspensions and tend to dislike the chrome finishes and bold colors that are common in Chinese vehicles. In the lead-up to the brand’s launch in Brazil, cars were flown back and forth between China and Brazil to fine-tune the models for Brazilian tastes.