Brazil continues to import low-end auto parts from China

Since the decline in industrial competitiveness resulting from the appreciation of the Brazilian currency, the Brazilian auto parts industries were forced to import auto parts from China instead of continuing production of certain parts. Therefore, Brazilian imported auto parts from China will have a substantial growth in 2007.

Statistics from Brazil Auto Parts Association show that Brazilian auto parts imported from China in 2006 amounted to 215 million U.S. dollars, an increase of 55.5%; Brazilian auto parts exports to China amounted to 197 million U.S. dollars, up 13.3%. It is the first time for Brazil to be in deficit in Sino-Brazil trade since 2000.

According to relevant data, after deducting tariffs, freight and port charges, China's auto parts and products generally are still 20-30% cheaper than that of Brazil. Entrepreneurs said that it's likely that whole set of spare parts will be imported from China and assembled in Brazil.

In addition to auto parts enterprises, Brazil GM, Fiat and other automobile plants began to buy spare parts from suppliers of their parent companies in China directly. Fiat not only imports small metal parts used in Palio brand from China, and even join hands with other companies to request local suppliers cutting their prices.

Although Brazil's auto parts import from China is expanding, the import are mainly low technology content products such as metal pieces, cast iron, screwdriver, rubber (22065, 435, 2.01%) and speakers and others.