Hebei-based automaker Great Wall Motor has purchased a factory in Brazil from Daimler AG for an undisclosed price, the company announced on Wednesday. Over the next five years, Great Wall Motor plans to invest more than 5 billion yuan ($770.13 million) in the factory, aiming for an annual production capacity of 100,000 vehicles.
German automaker Daimler AG, which is the parent company of Mercedes-Benz, also confirmed the acquisition on Wednesday. The Stuttgart-based firm closed the Brazilian factory in December of last year, citing economic difficulties amid a worsening Covid-19 pandemic.
The acquired facility was the only Mercedes-Benz passenger car factory in Brazil. It started production in March 2016 with 200 million euros of investment from Daimler, mainly producing C-Class and compact SUV GLA vehicles, with an annual capacity of 20,000 units.
Chinese media outlet Jiemian News reported that the two companies commenced negotiations regarding a potential acquisition in the second half of 2020. The deal reached is a purely asset-based transaction, including only land, the factory, machinery and equipment, without any personnel transfer. The transaction price is confidential.
The addition of a factory in Brazil will accelerate the development of Great Wall Motor in South America, and further promote the transformation of the firm into a global technology company. The automaker will build a local operations team in Brazil, with its headquarters expected to be located in Sao Paulo.
Great Wall Motor has entered more than 14 countries in South America. At present, the firm has a small factory in Ecuador, supplying Uruguay, Peru, Bolivia, Paraguay, Argentina and Chile.