Brazil’s growing imports of partially assembled vehicles from China could pose a significant threat to thousands of jobs in the South American country’s automotive sector, according to Herlander Zola, president of Stellantis NV’s South America operations.
Chinese automakers, including BYD Co and Great Wall Motor Co, have increased their market share in Brazil by shipping knock-down kits—vehicles assembled only in part abroad and completed locally—thereby reducing the labor required for final assembly. Zola noted that if this model becomes dominant, Stellantis would need only about 10% of its current workforce of roughly 35,000 employees in South America.
Chinese brands have made rapid inroads in the Brazilian new-car market. Through the first nine months of 2026, Chinese automakers held about 17% of the market share, surging to 25% in September alone, a sharp rise from roughly 9% in 2025. “No one could have predicted this kind of acceleration,” Zola commented.
While some Chinese firms such as BYD are planning local production—BYD is set to start manufacturing at a site in Bahia state by the end of this year—Zola argued that these companies have not yet integrated significantly into Brazil’s industrial base or supplier network. He pointed out that none of the Chinese automakers established in the country currently draw heavily from Brazil’s automotive supply chain.
To remain competitive, Stellantis may consider adopting a similar knock-down kit strategy, potentially leveraging partnerships with Chinese automakers Leapmotor and Dongfeng. Zola emphasized that the company has a full range of options to adapt to changing market conditions in Brazil, Argentina, and other regional markets.
The rapid expansion of Chinese automakers in Brazil and other auto-producing countries has sparked debate about how domestic industries should respond. Some industry leaders, including Zola, have called on the Brazilian government to develop a clear industrial policy that supports local manufacturers, possibly through enhanced import barriers and incentives for domestic production. He criticized current policies, noting that the existing 35% tariff on imported electric vehicles does not sufficiently encourage investment in local manufacturing or supply chains.
Brazil is currently in a politically sensitive period ahead of runoff presidential elections scheduled for October 25. Opposition candidate Flavio Bolsonaro, who holds a narrow lead over incumbent Luiz Inacio Lula da Silva, has not specified an auto-industry policy. Lula’s administration introduced a green mobility and innovation program in 2024 that included sustainability requirements and tax incentives targeted at decarbonization and new technologies.
Zola suggested that once the election outcome clarifies the government’s direction, the automotive supply chain will need to adjust to the resulting industrial policies regardless of political affiliation. He urged for a structured approach to ensure the resilience and competitiveness of Brazil’s automotive sector amid rising foreign competition.