February 27, 2024

Will BYD’s new factory be enough to plug Ford’s hole in Bahia?

In January 2021, about 4,000 workers at the Ford plant in Kamakari (BA) lost ground. The American manufacturer announced the end of auto production in Brazil and, in doing so, closed the Bahia plant as well as the Taubaté (SP) plant, laying off thousands of people.

Now, according to information from the columnist V Yul Carus Jorge Moraes, these are happy times for the largest country in the Northeast: the Chinese company BYD, the world’s largest producer of fully electric vehicles, will take over the plant belonging to the American brand.

The end of Ford car production in the country was a tragedy for the region. The plant, which has a production capacity of 250,000 cars a year and 210,000 engines, has provided more than 7,000 jobs, including its suppliers who also left the site. Currently, in Bahia, about 1,500 people continue to work in the engineering field of the company, on international projects.

Although the arrival of BYD, with an investment of R$3 billion, is positive, one must keep in mind that it will not be a “new Ford”.

According to information from Jorge Moraes, initially, the industrial planning target will be 30,000 vehicles, with the possibility of reaching a production capacity of 150,000 units per year: less than half of what the American company produces, between engines and vehicles. . In addition, 1,200 jobs are expected to be created.

Well maintained, Ford plant in Kamakari awaits buyer

What does BYD’s arrival in Brazil mean?

After an indigestible period for the country’s auto industry, with the factories of several automakers, such as Ford, Caoa Chery, Mercedes-Benz Automóveis, and Audi closed (reopened after months in the SKD system), it takes Chinese BYD good news about the country to reach the world. . The interest of the world’s largest electric company in Brazil could be a catalyst for other multinationals to see the country beyond just a source of raw materials.

If BYD’s new plant in Camaçari cements itself as an exporter, it will have everything to be successful and reposition Brazil as an exporter of technologies. However, when we analyze the internal market, the challenge is great. While Ford has produced full-size cars like the Ka and Ecosport, BYD will have the challenge of marketing both hybrid and electric models.

To give you an idea, during 2022, adding all brands, 49,200 units of electric vehicles were sold in the country, of which 8,400 units were all-electric only.

Another point is that, unlike years ago, when many automakers set up shop in the country, we are currently experiencing a slowdown in the automotive sector, with a 0.7% drop in car sales compared to the previous year. A situation that may hinder the plans of BYD, which has announced that it will start producing cars in the country only when it reaches the threshold of 10,000 cars sold annually.

BYD is an old acquaintance of the Bahia government

BYD already has an agreement in progress with the government of Bahia, but to build a light rail (VLT) car that will replace aging trains at Suberbio Ferroviario in Salvador. The model will consist of 100% clean energy and electric vehicles, developed by BYD member Skyrail Bahia.

First, an agreement worth R$2.8 billion was signed for the first phase of the operation, but an addition was needed because the company would also operate in the second phase. The value of the account is R$5.2 billion, which is R$2 billion more than what will be invested. at the Kamakari Factory.