Stellantis calls for measures to offset Chinese competition in Brazil

Stellantis, owner of brands such as Fiat, Jeep, and Citroën, said Brazil should consider adopting mechanisms to offset the competitive advantage of Chinese automakers, arguing that current conditions threaten the long-term sustainability of the local industry.

“There is a competitive gap with Chinese brands in the market that needs to be addressed,” said Antonio Filosa, the company’s regional president, at a press conference in São Paulo. “An equalization mechanism for this type of competition should be designed and implemented.”

According to Filosa, China’s structural competitiveness is the result of two decades of coordinated industrial policy and investment, creating a highly efficient production ecosystem. He also pointed to excess industrial capacity in China, which is increasingly being directed to external markets.

“With the U.S. market largely closed and Europe debating the issue, South America—and Brazil in particular—has become a primary destination,” he said.

Filosa said it is still difficult to assess the full impact of current tariffs, given the large volume of vehicles imported in previous months that are still in transit or being distributed.

“What needs to be done is to technically measure this gap and define how to translate it into an equalization mechanism, whether through existing global tools or a specific solution—not just tariffs,” he said.

The company suggests that the Brazilian government and the National Association of Vehicle Manufacturers (Anfavea) conduct a technical study to quantify the gap and design an appropriate policy response.

Filosa cited the United States as an example, noting that the country imposed tariffs of up to 100% on Chinese-made electric vehicles and adjusted CO₂ requirements to avoid an unintended contraction in the domestic market.

“In our view, the U.S. administration carried out a technical assessment to understand this competitiveness gap and determine how to protect the sustainability of its auto industry,” he said.

In Brazil, however, Filosa described operations as stable and growing, in contrast with challenges faced by the group in other regions.

“South America is performing very well. It is not a source of concern—on the contrary, it represents an opportunity,” he said.

Despite strong sales performance, he noted that profitability is under pressure due to high costs and logistical bottlenecks, which make local production more expensive than in other markets.

“The weight of logistics costs in the structure of a Brazilian-made vehicle is higher than in Europe or North America,” he said.

Leapmotor partnership

Stellantis said it plans to begin production of vehicles from Chinese brand Leapmotor in Brazil in the first quarter of 2027, with two models to be manufactured at its Goiana plant in the state of Pernambuco.

The partnership makes Brazil the first country outside China to produce Leapmotor vehicles. The models—B10 and C10—will use Stellantis technology that combines an internal combustion engine to power an electric drivetrain.

“We are setting up the production line and training personnel. It is a strong technical partnership,” Filosa said, adding that full operations should be in place by early next year.

Founded in 2015 in Hangzhou, Leapmotor produces electric and hybrid vehicles. Stellantis acquired a roughly 20% stake in the company in 2023 and established a joint venture to expand the brand internationally.

Asked about the apparent contradiction between advocating protection measures and partnering with a Chinese automaker, Filosa said the company’s strategy differs from that of pure exporters.

“Our approach is different. We localize production and a large share of components, including the engine,” he said.

Middle East

Stellantis said it is monitoring the conflict in the Middle East involving the United States, Israel, and Iran, and warned that rising inflation and shifting demand could affect operations.

“There is significant market volatility in a complex geopolitical environment,” Filosa said.

Operations in the Gulf region—including the United Arab Emirates and Saudi Arabia—are already facing disruptions, with some decline in sales volumes expected.

“We are already anticipating some volume losses, which are manageable for now. But much depends on how long the geopolitical crisis lasts,” he said.

Filosa added that inflation remains a key risk, depending on the persistence of global volatility.

“Volatility and inflation are real risks ahead,” he said.

Source: Valor International

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