Changan's Gambit: A Chinese Auto Giant Enters a Volatile Brazil

SÃO PAULO, BRAZIL – November 25, 2025

The return of the São Paulo Auto Show after a seven-year hiatus was marked by a spectacle of global ambition and national pride. At the center of it all was Chinese automotive titan Changan, which orchestrated a grand entrance into the Brazilian market complete with the launch of its premium AVATR electric vehicle (EV) brand, the endorsement of supermodel Gisele Bündchen, and a high-profile visit from President Luiz Inacio Lula da Silva. The message was clear: this was not a tentative first step, but a full-scale strategic incursion.

Beneath the polished veneer of the launch event, however, lies a complex and high-stakes gamble. Changan is stepping into one of the world's largest but most challenging automotive markets, armed with a powerful local partner, CAOA, whose own history is a testament to the turbulence of such international ventures. The official promises of a “full-value chain collaboration” and deep local investment are now pitted against a landscape of fierce competition, protectionist policies, and a history of foreign partnerships that have soured.

The 'Vast Ocean Plan' Meets Brazilian Reality

Changan's move is a cornerstone of its “Vast Ocean Plan,” an aggressive global expansion strategy unveiled in 2023. The plan is breathtaking in scope, calling for over $10 billion in overseas investment and targeting 1.5 million in foreign sales annually by 2030. Having already sold over 500,000 vehicles internationally in 2024, Changan is a formidable global player, not a newcomer. Brazil represents a critical beachhead in the Americas for this expansion.

However, the Brazilian market is not an empty chessboard. It is a mature, fiercely contested arena dominated by established giants like Fiat, Volkswagen, and Chevrolet, which together command nearly half the market. Furthermore, Changan is not the first Chinese automaker to see opportunity here. Brands like BYD and Great Wall Motor (GWM) have already made significant inroads, particularly in the burgeoning EV sector, by skillfully navigating Brazil’s protectionist policies and investing heavily in local production.

This local-first approach is now all but mandatory. The Brazilian government's MOVER program, launched in June 2024, offers billions in R&D-linked credits to incentivize decarbonization and local innovation. Simultaneously, the government has been progressively hiking import taxes on EVs, with tariffs rising to 25% in July 2025 and set to hit 35% by 2026. This policy has a clear objective: to transform Brazil from a simple consumer market into a manufacturing hub. Changan’s promise of a joint R&D effort involving over 300 engineers and more than a million kilometers of local testing is not just good marketing; it is a direct response to a policy framework designed to separate the truly committed from the merely opportunistic.

The CAOA Conundrum: Powerful Partner or Risky Bet?

Central to Changan's strategy is its partnership with CAOA, a titan of the Brazilian auto industry. As the largest dealership group in Latin America and an experienced manufacturer, CAOA offers unparalleled market access and infrastructure. The group operates over 240 stores and two assembly plants, and has been the local face for international brands like Subaru, Hyundai, and Chery.

Yet, this is where the column of accountability and justice finds its focus. CAOA's history provides a cautionary tale. Its long-standing and once-fruitful partnership with Hyundai has been described by industry insiders as “turbulent,” marked by disputes over import rights and production strategies. Recent reports from June 2025 indicate this decades-long partnership has finally concluded, with shared factory operations ceasing—posing a significant challenge for CAOA's Anápolis manufacturing plant and raising questions about its long-term strategy.

This history casts a long shadow over the new CAOA CHANGAN venture. The press release promises a deep, “full-value chain collaboration” from R&D to after-sales service. But will this partnership truly foster the technology transfer, local employment, and sustainable growth it advertises? Or will it follow the pattern of past alliances, where initial enthusiasm gives way to strategic friction and divergent interests? The system as it should work involves mutual investment and shared success. The system as it has worked in Brazil is often far more complicated, and the fate of the Changan-CAOA alliance will be a crucial test case.

Seduction by Tech and Celebrity

To win over the Brazilian consumer, CAOA CHANGAN is deploying a two-pronged attack of cultural resonance and technological prowess. The choice of Gisele Bündchen as brand ambassador is a masterstroke of marketing. She is not merely a celebrity; she is a globally recognized Brazilian icon associated with environmental advocacy and national pride. Her endorsement lends immediate credibility and a powerful emotional connection to a brand that is, for now, an unknown quantity to most Brazilians.

The product Gisele is endorsing is equally strategic. Rather than leading with a mass-market vehicle, Changan chose to showcase AVATR, its premium EV brand built on the “CHN” platform—a collaboration between Changan, Huawei (providing the intelligent systems), and NCATL (the battery giant). With its “Emotive Luxury” positioning and focus on advanced driver-assistance and smart cockpit features, AVATR is designed to leapfrog the competition on technology, not just price.

This strategy is a hallmark of the new wave of Chinese automakers: using EV technology and software integration as a battering ram against the gates of established markets. The question is whether Brazilian consumers, who have traditionally favored familiar, value-oriented brands and are still grappling with high vehicle prices, are ready to embrace a high-end, tech-forward EV from a new Chinese player. The “Gisele effect” is designed to bridge that gap, wrapping cutting-edge, unfamiliar technology in a familiar and trusted cultural flag.

A Presidential Push and a Nation's Hopes

The final piece of the puzzle is political. President Lula’s visit to the Changan booth was far more than a diplomatic courtesy. It was a powerful signal of his administration's industrial policy in action. Lula’s government is staking significant political capital on the MOVER program to re-industrialize Brazil, with a focus on green technologies and high-value manufacturing. His praise for AVATR’s design and smart features was an endorsement of the type of investment he wants to attract.

His presence sent a clear message to both Changan and the wider industry: Brazil is open for business, but on its own terms. The government expects foreign investment to translate into local jobs, technological development, and a stronger domestic industrial base. Changan’s announced plans for localized R&D and manufacturing are perfectly aligned with this national agenda.

The confluence of Changan's global ambition, CAOA's local power, and the Brazilian government's industrial policy has created a pivotal moment. The venture's success or failure will have consequences that ripple far beyond dealership showrooms, impacting local supply chains, engineering talent, and the country's broader transition to electric mobility. For Brazil, the true test will be whether this partnership translates into sustainable industrial growth and genuine innovation, or simply becomes another chapter in the long history of foreign automakers' fleeting promises.