JAC (Jianghuai) Teams up with Brazilian Dealer SHC

Anhui Jianghuai Automobile Co., Ltd. (JAC Motors) (600418.SS) announced on August 31 that it signed an agreement with Brazil’s SHC aiming to sell 620,000 JAC vehicles between 2010 and 2020 in the country.

As the largest auto dealer in Brazil, SHC has a 25-year history and more than 60 shops selling Ford, Volkswagen, Citroen, Jaguar, and Aston Martin cars. Its current annual new vehicle sales are around 80,000 units. JAC brand vehicles will hit its showrooms toward the end of this year; the target is to sell 35,000-45,000 of them next year, and 50,000 units in 2012, including sedans, the Rein (Ruiying) SUV, the Refine (Ruifeng) MPV, as well as light-duty trucks.

If the targets are met, Brazil will become JAC’s largest overseas market.

JAC sold 320,000 vehicles last year, including 12,100 units overseas. In the first seven months of 2010, it exported 12,200 units.

As the fourth largest auto market in the world, and one of the fastest-growing, Brazil has become a focus of Chinese automakers’ overseas expansion. Last month, Chery Auto, based in the same province–Anhui–as JAC, was reported to build a plant in Jacarei, a city in São Paulo state, with an investment of $700 million. Expected to open in 2013, the Chery plant can roll out 170,000 cars a year. Great Wall Motor recently also expressed intention to set up Brazilian production.