Brazil’s Lula heads to China with plans to promote BYD takeover for Brazil Ford factory

President Luiz Inacio Lula da Silva is eager to make a significant announcement about the factory during his China trip, a source said

‘For the Chinese it is important to set up in Bahia because … they are Chinese replacing Americans,’ a Brazilian diplomat said on condition of anonymity

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Published: 2:36am, 25 Mar 2023Updated: 6:47am, 25 Mar 2023

Brazilian President Luiz Inacio Lula da Silva heads to China next week with plans to promote Chinese manufacturer BYD’s takeover of a former Ford factory in northeast Brazil, according to sources with knowledge of the matter.

The deal hinges on a final agreement with Ford Motor Co, which still owns the plant in Bahia state despite halting production in Brazil in 2021, sources told Reuters.

Brazilian President Luiz Inacio Lula da Silva at the Planalto Palace in Brasilia, Brazil on Friday. Photo: AFP

In October, BYD signed a letter of intent with the Bahia government signalling plans to invest 3 billion reais (US$570 million) to set up electric vehicle production in the Camaçari industrial estate, outside the state capital Salvador.

Executives at BYD, which sells more electric cars than Tesla in Asia but lags behind in other regions, told Reuters in November that they hoped to reach a firm agreement on the Bahia plant by the end of 2022.

BYD and the Bahia government said talks are still under way. Ford declined to comment.

A Brazilian diplomat, who requested anonymity to discuss the matter, said Lula is eager to make a significant announcement about the factory during his trip. He broke into politics as a union organiser for autoworkers over four decades ago in Brazil, where Ford’s plant closures stirred deindustrialisation fears.