(Adds background on Great Wall)
BEIJING/RIO DE JANEIRO, Aug 18 (Reuters) – Daimler AG has sold a factory in Brazil to China’s Great Wall Motor Co Ltd for an undisclosed sum, the companies said on Wednesday, marking the Chinese manufacturer’s arrival in Latin America’s largest economy.
Baoding-based Great Wall, China’s top pickup-truck maker which also builds vehicles in Russia and Thailand, in a separate statement said it would revamp the factory to have an annual production capacity of 100,000 vehicles.
Reuters reported last week, citing people familiar with the matter, that Great Wall has decided to re-allocate to Brazil a portion of its $1-billion investment in India, as the automaker has been unnerved by a year-long delay in winning government approvals.
Global sales are key for Great Wall, which sold 1.1 million vehicles last year and aims to deliver four million cars a year in 2025.
German premium automaker Daimler had said in December it would wind down car production in Brazil, shutting down a factory dedicated to producing Mercedes Benz luxury vehicles since 2016 in the city of Iracemapolis in Sao Paulo state.
The Mercedes plant had opened when Brazilian industrial policy forced several automakers to open plants if they wanted to sell big volumes locally, leading to overcapacity as demand has recovered slowly from a deep downturn.
Daimler said in December that a drop in sales of luxury cars during the COVID-19 pandemic had made it unsustainable to keep the factory open.
The factory and its grounds cover 1.2 million square meters, Daimler said in its release.
Reporting by Yilei Sun in Beijing and Gram Slattery in Rio de Janeiro; editing by Barbara Lewis, Kirsten Donovan