China's Lifan, Effa to build Brazil automobile R&D center

Dow Jones Newswires (São Paulo) - Lifan Industry (Group) Co. (601777.SH) and the Effa Group said Wednesday they will invest $70 million in Brazil to build Lifan's first automotive research and development center outside of China.

The Lifan and Effa R&D center will help develop a compact car that will be sold globally, as well as work on alternative energy motors, the companies said in an emailed statement. The center, to be built between the cities of Sao Paulo and Campinas, will also help certify vehicles sold in Latin America by the companies.

Chinese and South Korean automakers have been rushing to Brazil, the world's fourth-largest car market, with Hyundai Motor Co. (005380.SE) recently beginning work on their first Brazilian plant. The influx of Chinese and South Korean cars have helped whittle away market share from U.S. and European companies that historically dominated the market. Fiat SpA (F.MI, FIATY) Volkswagen AG (VOW.XE, VLKAY) General Motors (GM) and Ford Motor Co. (F) together account for about 80% of Brazil's sales of some 3.5 million vehicles.

Lifan and Effa, a Brazilian importer of Chinese brands, together last year sold 5,082 automobiles in Brazil, according to the Latin American country's auto importer association Abeiva.

The companies didn't say if they plan to build an assembly plant in Brazil. Some Lifan and Effa vehicles currently are produced in Uruguay, according to the statement.