*

Chinese brands gain legitimacy, challenging Western

carmakers

*

China-built megaport in Peru seen as gateway to the region

*

EV sales still a small segment but Chinese firms see room

to

expand

By Lucinda Elliott and Marco Aquino

MONTEVIDEO/LIMA, Nov 17 (Reuters) - When Peruvian green

energy entrepreneur Luis Zwiebach wanted to buy an electric

vehicle in 2019, he flew 4,000 miles to California to test drive

Tesla's Model 3 sedan. But Tesla lacked an official

importer and he couldn't find a way around Peru's complex

vehicle import procedures.

He was not deterred. "There was a gentleman who had already

imported one and wanted to sell it," Zwiebach said. "So I went

to see it, and I bought it."

Charging the Tesla initially proved difficult at his

friend's beach house outside Lima. "The car wouldn't charge

because there was no grounding device," he said. "We grabbed a

fork, stuck it into the soil to make a ground - and the car

charged."

Today, it's not so hard to take the plunge on an EV in Peru.

Tesla still lacks a showroom but there's been an influx of

Chinese models from the likes of BYD, Geely and GWM,

which sell electric vehicles here at around 60% of the price of

a Tesla, as well as legacy manufacturers such as Toyota ( TM )

, Kia and Hyundai. Tesla did not respond

to a request for comment.

Chinese car makers are widening their footprint across South

America with both traditional vehicles and EVs. EVs are still a

small slice of the 135,394 new cars sold in Peru in the nine

months to September, according to the country's automotive

association, but they are on the rise. Sales of hybrid and

electric vehicles hit a record 7,256 units in that period, up

44% year on year.

China has been ramping up sales since the opening last year

of the Port of Chancay, north of Lima. The Chinese-built

megaport has halved trans-Pacific shipping times just as Chinese

manufacturers face rising barriers to entry in the United States

and greater trade restrictions in Europe.

BYD , which makes EVs, plug-in hybrids and

combustion engine cars, plans to open a fourth dealership in

Lima by the end of this year, while Chery and Geely

have more than a dozen in total in Peru.

"The electric car is doing very well here, more than two new

cars are sold every day," Zwiebach said from Lima.

He said rising demand had encouraged him to expand his

renewables business, offering EV charger installations as well

as solar panels and regenerative elevators to clients in Lima

and Arequipa, including real estate developers, universities and

shopping centers.

"A property developer told me he'd buy the penthouse - if it

came with a car charger," Zwiebach said. "So that's what we did.

You just plug it in at home, like a phone."

Chinese carmakers face a profit-destroying price war at home

and a growing surplus of new cars rolling out of Chinese factory

lines. Much of this excess is being shipped overseas to the

Middle East, Central Asia and Latin America, according to global

automotive analyst Felipe Munoz at JATO Dynamics.

The Chinese have "carved out space," across both electric

and petrol-powered cars, said Martin Bresciani, president of

Chile's automotive business chamber, CAVEM. "The Chinese have

already demonstrated that they match global standards in

quality."

Chinese brands reached 29.6% of all new passenger car sales

in Chile in the first quarter of this year.

CHINESE FIRMS ON THE RISE ACROSS LATIN AMERICA

EV penetration in Latin America, including Mexico and

Central America, doubled in 2024 to around 4%, and continues to

grow, boosted by government incentives and an influx of

affordable Chinese models, the International Energy Agency said

in its Global EV Outlook 2025.

Latest figures show EV market share hit 10.6% of new cars

registered in Chile in September, 9.4% in Brazil in August, and

28% in Uruguay in the third quarter of the year - all record

highs, according to local car associations and consultancy

firms. In Europe and China, half of new cars registered by

mid-2025 were EVs (56% and 51% respectively). In Japan and the

U.S. rates were lower, closer to 2% and 10% respectively.

Even in Argentina, where economic headwinds persist and trade

barriers are higher, EV sales are rising from a low base.

China's largest carmaker, BYD, launched in Argentina for the

first time in October. The company already leads electric car

sales in Brazil, Colombia, Ecuador and Uruguay.

Part of China's success has been partnering with trusted

local importers to offer more affordable models tailored to

regional tastes, according to seven dealerships Reuters spoke to

in Peru, Chile, Uruguay and Argentina.

Nowhere is this shift more visible than in Uruguay, where

BYD is the third-biggest seller across all vehicle types,

trailing only General Motors' ( GM ) Chevrolet and Hyundai

. China's market share has more than doubled in the

country since 2023 and is now 22%.

At the entrance to Uruguay's glitzy beach resort town of

Punta del Este, luxury car dealer Gonzalo Elgorriaga began

displaying BYD models a few years ago. While he still sells

European and Japanese brands, BYD now dominates sales.

"The Chinese struck first and struck hard," said Elgorriaga,

speaking to Reuters from his Stars Motors dealership overlooking

Mansa beach.

Chinese brands have gained legitimacy and scale, he said.

They collaborate with local banks to offer credit lines and

prize draws. Competitive prices are also instrumental in their

appeal. Prices in Uruguay for Chinese battery electric vehicles

(BEV) from BYD start at $19,000.

"I can buy three Chinese pick-ups, for the price of two

traditional brands. That's a big difference," said another

Uruguayan car dealer, Federico Guarino.

NEW MEGAPORT OPENS UP THE CONTINENT FOR CHINA

In Chancay, Peru's megaport built under China's Belt and Road

Initiative, rows of white sedans and stacks of multicolored

containers have replaced the seaside restaurants which once

welcomed weekend visitors to the sleepy fishing town.

"Each ship brings 800 to 1,200 vehicles," said Gonzalo Rios,

deputy manager at Cosco Shipping, the port operator, speaking to

Reuters in October. Cosco expects the total number of vehicle

arrivals from China to reach 19,000 by the end of the year.

Vehicles that arrive here are traveling beyond Peru. Cosco

Shipping completed its first vehicle trans-shipment by boat in

September, sending 250 cars south to Chile, where Chinese brands

captured 33% of the overall car market in July. Another

trans-shipment was underway last week, moving hybrids and EVs to

Chile.

Cosco has also directed shipments to Ecuador and Colombia,

aiming to turn Peru into a regional distribution hub for hybrid,

electric and conventional Chinese cars, Rios said. China's

Chery, which held less than 2% of Peru's EV market in September,

is already using the corridor to accelerate deliveries across

the continent, the company said.

Peruvian customs data show that in July alone, 3,057 cars

arrived at the port, up from 839 in January. Peru does not have

a large-scale car manufacturing industry to complain about the

Chinese sales push, but elsewhere it has caused some tension,

notably in Brazil.

Some Chinese firms are making factory investments in Brazil,

whose tariff barriers serve as an incentive to produce locally.

BYD began assembling EVs in October at Ford's former plant in

Bahia and Great Wall Motors (GWM) launched partial production in

August at a repurposed Mercedes-Benz facility.

Ricardo Bastos, director of Institutional Affairs at GWM

Brazil and president of the country's EV association, ABVE, said

the company expects to begin exporting vehicles from its Brazil

factory to the region by 2027-possibly earlier-leveraging

favorable trade agreements with Mexico, Chile and the South

American trade bloc Mercosur.

"Brazil was the third country to receive a (GWM) factory

after Russia and Thailand - it's a strategic decision, showing

the strength Latin America has," Bastos said in an interview.

Large quantities of Chinese cars are also being imported to

Brazil. Earlier this year, the world's largest car-carrying ship

docked at Brazil's Itajai port, carrying around 22,000 vehicles,

according to Reuters calculations.

Brazilian industry and labor groups say China is taking

advantage of temporarily low tariff barriers for EVs in South

America's largest car market to ramp up its exports rather than

investing to build Brazilian factories and create jobs. BYD has

also faced scrutiny over reports of poor conditions for some

workers at its new Bahia plant. The government has since moved

to re-impose import duties. Tariffs on foreign EVs began

returning last year and are scheduled to reach 35% by July 2026

- which Bastos at GWM said was why the on-site factories would

be key.

Brazil could soon mirror Chancay as a regional distribution

center. The port of Vitoria on Brazil's southeastern Atlantic

coast, currently leads in national vehicle imports.

BYD's country manager for Argentina, Stephen Deng told Reuters

in October that the company was expecting arrivals from Brazil

in 2027. "I think we could eventually see Argentina adopting the

same EV rates that we see in Brazil," Deng said.

EV adoption still faces hurdles in South America, including

long distances and uneven charging networks, said Bresciani,

president of Chile's automotive business chamber.

"If you want to travel the entire Peruvian coast from Tumbes

to Tacna, it's difficult," Zwiebach said.

"But the car costs less to run and never needs to go to the

service garage."