Stellantis focus more and more on South America, and it's not the only automaker to do so. The announcement of 5,6 billion euros (30 billion reais) of investments in Brazil between 2025 and 2030 was the last in a series that saw the largest country in Latin America at the center of a truly global strategy. In fact, in the last three months only in Brazil the car companies have announced investments of over 70 billion reais, equal to just under 15 billion euros, which becomes 117 billion reais (24 billion euros) also considering the Chinese groups BYD e GWM and the entire period from 2021 to 2032. The Italian-French group tops the list for money allocated by a single company, but the overall value is record-breaking and almost all of it will go into the production of new generation models.
Car manufacturers are focusing on Brazil
In detail, a few days ago Toyota had announced an 2030 billion reais plan for 11; while previously Hyundai launched a 5,5 billion reais investment between now and 2032 in green hydrogen; Volkswagen with a horizon of 2028 it allocated 16 billion reais, just over half of what Stellantis did, with a focus on the energy transition; General Motors had in turn announced 7 billion reais in sustainable mobility and the development of green hydrogen; the Chinese BYD will spend 3 billion reais on three new factories capable of building 150.000 vehicles a year (it will be the largest production center outside Asia); the other Chinese GWM will invest 10 billion reais in 10 years; Renault 5 billion reais by 2027; Nissan 2,8 billion by 2025; and finally the group caoa, distributor of the Subaru, Hyundai and Chery brands in Brazil, placed 4,5 billion.
Stellantis' plan for the Brazilian market
In short, the energy transition and sustainable mobility pass through South America and above all through Brazil, where Stellantis above all through the Fiat brand has been rooted for decades, but this time it has doubled the stakes: in the latest plan, launched in 2018, the group had invested 16 billion reais, just over half of what was announced this week.
The new plan includes the launch of 40 models by 2030, among those completely new and others renewed, with a focus on the production of flex hybrid models through the Bio-Hybrid platform already launched last year and, over time, also of full electric vehicles. For the country governed by Lula this is the opportunity to reindustrialise, while among the reasons that pushed Stellantis and the other companies to invest in Brazil, economists cite the drop in interest rates, the stable currency with inflation below control (lower than expected at the beginning of 2024), as well as the good prospects for economic growth, after Brazilian GDP closed 2023 at almost 3%.
Brazil and the green market
Furthermore, Brazil has a large availability of ethanol, a clean fuel that awaits the development of new technologies, such as the highly anticipated one ofgreen hydrogen, is able to immediately place fleets of green vehicles on the market. However, analysts point out, the monstrous investments are also doped by government subsidies. Already in the previous cycle, from 2012 to today, the Inovar Auto state program had given out an average of 6,2 billion reais per year, while this year the Treasury expects revenue from the car market to drop by almost 10 billion reais (around 2 billion euros). This decrease must be attributed to tax breaks and corresponds, perhaps not entirely coincidentally, to the annual average of home investments between now and 2032 (9,7 billion reais, to be precise). In short, this boom could be a bubble, a dog chasing its tail, but in the meantime Brazil's economy itself and the global ecological transition will benefit.
The components market is also tempting
Not to mention that in Brazil and Latin America there is also a very thriving one components market, which is worth around 20 billion euros and in which Stellantis itself wanted to carve out a leading role, acquiring 70% of the Brazilian group in January Commercial Automotive, owner among others of D-Paschoal, a leading company specializing in car services and spare parts. The Italian-French group is betting everything on South America not only for electrification, but also to become a "mobility tech company", that is, a company capable of offering 360-degree innovative services in the field of mobility.
