Argentina, Brazil Lead South America's Top Five Automotive Projects

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

South America's top five automobile industry projects represent US$4.01 billion in investments.

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Clear Leaders

Argentina and Brazil lead South America's automobile projects in investments, representing the region's top five projects and forecasted investments of US$4.01 billion, according to Industrial Info Resources data. Most projects involve expansions, modernizations and upgrades, while Kia's grassroot plant in Brazil seeks to expand the brand's presence in South America's biggest economy.

The biggest project is Toyota Argentina's Zarate automotive assembly plant expansion. It seeks to develop new production lines, including battery assembly and testing, for new electrified vehicles targeting export markets. The project amounts to US$1.34 billion and has been approved under Argentina's Incentive Regime for Large Investments (RIGI), which grants fiscal, legal and foreign exchange benefits for projects in specific sectors and with projected investments of at least US$200 million. Construction could begin in the third quarter of next year, with completion targeted for 2030.

In second place is Kia Motors' Piracicaba grassroot automotive assembly plant in Brazil. The project is forecast to require around US$1 billion and would represent Kia's first assembly line in the South American nation. It would be sited near Hyundai's existing plant in Sao Paulo state to leverage shared parts of their supply chain, logistics and workforce. Construction is projected to begin in the third quarter of next year, with completion targeted for 2028 year-end. However, the project is threatened by a 1990s multibillion-dollar tax liability and court case left by Asia Motors, which was later acquired by Kia. The owners of Kia could be negotiating a tax waiver to guarantee construction, based on information published by Valor Internacional.

Meanwhile, General Motors has announced investments of US$701.9 million to modernize the Sao Caetano do Sul passenger car assembly factory in Brazil's Sao Paulo state. The project seeks to update the plant to build hybrid versions of its Chevrolet lineup and add artificial intelligence-driven manufacturing functions. The project is currently in preliminary engineering and could begin construction early next year, putting it on track to be completed by the end of 2028. Sao Caetano do Sul is Brazil's oldest continuously operating car manufacturing facility of General Motors Brazil, which was founded in 1925.

The fourth automobile project is Volkswagen's General Pacheco cars and trucks assembly plant modernization in Buenos Aires, Argentina, worth US$580 million. The project seeks to adapt the existing Taos assembly line to build the new 2027 Amarok pickup model, which would add 70,000--80,000 units of annual capacity, with 60% destined for exports. This project is already under construction and is expected to be completed by the second quarter of next year.

Finally, Prestige Auto's Virrey del Pino vehicles and vans assembly plant upgrade and electrification in Argentina is the fifth automobile project in the region, with investments projected at US$400 million. The plant serves for the assembly of Mercedes-Benz vehicles, and this upgrade would allow production of the electric version of the Sprinter van.

Key Takeaways

• South America's top five automobile industry projects amount to US$4.01 billion.
• Four of the five projects seek to expand capacity and modernize assets.
• Kia's Piracicaba project in Brazil is the only grassroot project amongst the top five in the region.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).