Young siblings lead CAOA’s shift: Philipe Andrade (23) and Carlos Alberto Andrade (26) are the public face of a new generation at Brazil’s CAOA, the auto group founded by their father in 1979. CAOA assembles Hyundai and Chery models at its Anápolis plant, operates a broad dealership network for Hyundai, Subaru and Chery, and plans to start producing cars for Chinese brand Changan later this year. The Anápolis facility roughly doubled output from about 30,000 vehicles in 2023 to roughly 60,000 the next year and expects to reach about 70,000 — yet CAOA remains a growing regional player rather than a dominant one. A Bright Consulting study in Campinas forecasts that by 2030 one in five new cars sold in Brazil will be Chinese-made.
Argentina sees a landmark arrival: On January 20 the Chinese carrier BYD Changzhou delivered 5,841 vehicles to the Port of Zárate, including fully electric models and a hybrid SUV. BYD, the world’s largest EV maker by unit sales, launched marketing in Argentina last year and operates through a wholly owned local subsidiary, keeping much of the value chain under Chinese control. BYD’s medium-term aim is to export 50,000 vehicles per year to Argentina — a target helped by President Javier Milei’s market changes. Milei has progressively liberalized imports of hybrids and EVs and set an annual tariff-free quota of 50,000 cars that would otherwise face a 35% duty; if maintained through 2029 the scheme could allow up to 250,000 vehicles to enter duty-free.
Other Mercosur markets are also shifting: Uruguay reported a sharp rise in EV demand — the Uruguayan Automobile Association (ACAU), representing 26 major automotive companies, recorded a 147% jump in EV sales in 2025.
European involvement under pressure: The influx of Chinese vehicles is intensifying competition across Latin America. European automakers had hoped an EU–Mercosur trade agreement would secure better access to Argentina, Brazil, Paraguay and Uruguay by cutting high local tariffs (parts tariffs of 14–18% and new-car duties up to 35%). Instead, the European Parliament has referred the deal to the European Court of Justice for review, creating uncertainty over provisional application and casting doubt on Europe’s reliability as a negotiating partner. Germany’s auto industry association (VDA) warned that delaying tariff cuts would forgo export opportunities and hamper Mercosur development; VDA leaders said the Parliament’s decision sends a damaging signal and could postpone the agreement for years.
Germany’s economic exposure: German automotive companies operate roughly 310 sites across Mercosur, mainly supplier facilities that provide local jobs. In the first half of 2025 German manufacturers produced about 289,200 passenger cars in the Mercosur region (mostly in Brazil and Argentina), while only 18,400 vehicles were exported from Europe to the region in the same period — highlighting the local production footprint even as European exporters face headwinds.
Outlook: The regional auto market is becoming a battleground. Chinese brands are expanding quickly through direct investment, local assembly and aggressive export plans, while European makers face political, legal and trade-policy uncertainty that may slow their response. As competition intensifies, the balance of influence in South America’s largest car markets appears to be shifting toward Chinese producers.