Chongqing's Lifan Group Transports Complete Engine Plant from Brazil

What do you do when you want to buy a technically superior engine factory that's 8,300 miles from your domestic production facilities?

Obviously, you strip it down, piece by piece, and ship it off to the middle of China.


The Lifan Group, a prominent motorcycle and emerging world car producer, is proposing to do just that: buy an engine plant in Brazil and ship it to Chongqing. The Brazilian Campo Largo plant, a $500 million investment by Daimler Chrysler and BMW from the 1990s, currently produces around 250,000 engines a year. This plant supplied BMW with the 1.6-liter, 16-valve Tritec engines for its gasoline Minis Cooper, and is considered one of the most advanced plants for producing highly efficient gasoline engines. However, the plant became a corporate orphan following the Daimler Chrysler merger and has been in limbo since.


This bid by the Lifan Group, backed by the provisional government, is representative of the strategy by Chinese automakers to become the world’s producer of cheap fuel sipping cars. Fueled by an intense demand in its domestic market, Chinese automakers grabbed 25% percent of the domestic car sales, up from 10% two years earlier. One of the biggest difficulties currently met by Chinese manufactures has been mass-producing high quality, fuel sipping engines for its cars.




The Lifan Group, modeling Honda'’s rise from motorcycle manufacturer to passenger car powerhouse, has recently unveiled its first sedan release. The Lifan 520, priced a little under 10k USD, comes equipped with airbags, DVD player, and leather seats. These cars will soon be exported to the Caribbean, the Middle East, and Southeast Asia. President and principal owner, Yin Mingshan, hopes to export to Europe by 2008, and the US by 2009.


Representatives from BMW and Daimler Chrysler have not confirmed the deal, but considering that their contract runs out with Campo Largo next year, they are entertaining a variety of options.


While Lifan would be buying the factory, negotiations on the Chinese side are headed by Huang Zhendong, a Chongqing CCP party official and a member of the powerful CCP Central Committee.