Shanghai bus maker to build plant in Brazil

Updated: 2014-03-17 05:13

By ELIANA KIRSHENBLAT in New York (China Daily Latin America)

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Shanghai-based Shenlong Bus Co Ltd (known as Sunlong) will be investing $15 million in a production center in Juiz de Fora, Brazil.

It will be the company's first production center outside of China.

The exact location of the center has not yet been disclosed, but it will cover 80,000 square meters and should be operational in two years.

Sunlong will start selling their buses in Brazil later this year.

Sunlong had considered setting up shop in countries where they already had distribution centers, including Chile, Argentina and Venezuela, but decided they wanted to be based in Brazil due to the country's increasing consumption of new technology, according to Sunlong's Brazil-based partner, Mauri Moreira de Oliveira.

Oliveira said the deal is the result of three years of negotiations and the choice of Juiz de Fora was the result of several factors. Oliveira, who previously lived in Juiz de Fora, included the city in Sunlong's site search and the company picked it because of its proximity to Sao Paulo and Rio de Janeiro.

Sunlong aims to fill the void left by BUSSCAR, a Brazilian bus manufacturer that went bankrupt in 2012.

There is also a growing trend towards use of public transportation in urban areas. Congestion and pollution are increasing with the rise of urban population and use of public transportation is increasing with it.

In Brazil, registration of personal cars tapered off last year, decreasing from an all-time high of 420,000 in 2012 to 313,000 in January 2014, according to the Brazil-based National Association of Automobile Manufacturers.

Altogether, automakers in Brazil produced about 281,500 new cars and trucks last month, while sales totaled about 259,300 vehicles, the association said.

Sunlong is not without competition. German-based manufacturer Daimler is currently the leading bus supplier in Latin America. According to data released by Daimler, their market share was 41.6 percent, down slightly from 42.7 percent in 2012. Daimler reported that demand in Brazil was “below expectations due to uncertainty in the market caused by the political situation in the country.

Brazil, ranked as the fourth largest auto market in the world, already does substantial business with China. China is responsible for 15 percent of all Brazilian imports, according to the Ministério do Desenvolvimento, Indústria e Comércio Exterior.

Like the cars and trucks already imported from China, Sunlong buses are attractive due to their competitive prices and the level of equipment included as standard.