China grows whereas Europe slows in South American EV market | EUROtoday

Young, tech-savvy, and future-focused — Philipe Andrade, 23, and Carlos Alberto Andrade, 26, embody a brand new technology of Brazil’s automotive elite. They are the heirs to the Brazilian auto group CAOA.

Founded in 1979 by their father, Carlos Alberto de Oliveira Andrade, CAOA stands for his identify and an extended custom of producing, importing, and promoting automobiles in Brazil.

The firm operates its personal meeting plant in Anapolis, producing Hyundai and Chery fashions, and runs an unlimited community of dealerships for Asian carmakers Hyundai, Subaru, and Chery.

Currently, the 2 Andrade brothers are setting the course for the way forward for the Brazilian auto trade, as they’ve unveiled plans to start out producing automobiles for an additional Chinese model, Changan, later this yr.

CAOA’s Anapolis plant doubled its output from 30,000 automobiles in 2023 to round 60,000 the next yr, and expects one other improve to 70,000 automobiles. The carmaker is just not but a market heavyweight although its manufacturing facility operates across the clock.

By the tip of 2030, each fifth new automobile offered in Brazil is predicted to return from China, based on a examine by Brazil’s automobile market analyst Bright Consulting in Campinas, Sao Paulo.

A historic arrival in Argentina

The identical pattern is unfolding in Argentina, the place the Chinese automobile provider BYD Changzhou docked for the primary time on January 20.

The purpose-built vessel, able to carrying as much as 7,000 automobiles, is reported to have unloaded 5,841 automobiles on the Port of Zarate in Buenos Aires province, strategically situated on the Parana River. The cargo included not solely totally electrical fashions but additionally a hybrid SUV mannequin.

BYD — the world’s largest electrical car maker by variety of automobiles offered  — started advertising its automobiles in Argentina final yr. Instead of partnering with native corporations, the corporate operates by way of an entirely owned subsidiary, retaining almost your complete worth chain beneath Chinese management.

BYD’s medium-term aim is to export 50,000 automobiles per yr to Argentina — a goal carefully tied to the latest coverage adjustments launched by Argentina’s libertarian President Javier Milei.

Milei has step by step liberalized the marketplace for hybrid and electrical automobiles and launched an annual quota of fifty,000 automobiles that may be imported with out paying the usual 35% import tariff. The quota may stay in place by way of 2029, permitting as much as 250,000 automobiles to enter the nation duty-free.

Elsewhere within the Latin American commerce bloc, Mercosur, Uruguay can also be seeing a surge in electrical car gross sales. According to the Uruguayan Automobile Association, ACAU, which represents 26 of the nation’s largest automotive firms, EV gross sales jumped 147% in 2025, as reported in its annual evaluation.

Europe hesitates as competitors intensifies

The arrival of Chinese automobiles marks the start of fierce competitors in automobile markets throughout Latin America.

European automakers had hoped a just lately signed free commerce settlement between Mercosur and the European Union would strengthen their place in Argentina, Brazil, Paraguay, and Uruguay. Instead, the European Parliament has quickly thrown the settlement into doubt, sending it to the European Court of Justice (ECJ) for authorized evaluation.

While the deal is predicted to use provisionally, the transfer introduces authorized uncertainty and sends a sign that Europe will not be a dependable associate relating to negotiated commerce agreements.

“For the automotive industry, an EU-Mercosur agreement would open up significant opportunities,” a spokesperson for Germany’s auto trade affiliation VDA advised DW earlier this month, as it will scale back presently excessive tariffs in Mercosur, which vary from 14% to 18% on car components as much as 35% on new automobiles.

At the identical time, EU tariff cuts would “create new export opportunities for Mercosur countries and strengthen their economic development,” the VDA spokesperson stated.

Following the European Parliament’s resolution final week (January 21) to refer the deal to the ECJ, VDA President Hildegard Müller advised DW that the vote was “a disastrous signal” that might delay the settlement’s entry into drive “significantly, possibly even by years.”

She known as for swift and definitive readability on the provisional software of the deal.

Germany’s excessive stakes

According to VDA, German automotive firms presently function 310 websites throughout the Mercosur area, most of them provider amenities that present native jobs.

In the primary half of 2025, German producers produced 289,200 passenger automobiles in Mercosur, primarily in Brazil and Argentina. During the identical interval, 18,400 automobiles have been exported from Europe to the area.

As competitors within the international auto market intensifies, the steadiness of energy is shifting nearly as quickly as geopolitical dynamics. The battle for South America’s two largest automobile markets has begun.

This article was initially written in German.