Stellantis has announced a substantial investment plan for the South American region totalling €5.6bn ($5.51bn) from 2025 to 2030. It says the plan is the largest investment in the history of the Brazilian and South American automotive industry.
The planned investments will support the launch of more than 40 new products during the period as well as the development of new ‘Bio-Hybrid’ technologies, new decarbonisation technologies across the automotive supply chain, and ‘strategic new business opportunities’.
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“This announcement solidifies our trust and commitment in the future of the South American automotive industry and is a response to the favourable business environment here,” said Stellantis CEO Carlos Tavares.
“As a critical part of our ‘third engine’ growth strategy, South America will take a leading role in accelerating the decarbonisation of mobility together with our employees, our supply chain network and our partners. I want to thank each team member involved in helping create and execute our investment strategy so that, together, we can achieve our industry-leading carbon neutrality ambition.”
As part of its Dare Forward 2030 strategic plan, Stellantis says it is investing more than €50bn in electrification over the next decade and is ‘on track to become a carbon net zero corporation by 2038’ with single-digit percentage compensation of remaining emissions. The company says South America plays a leading role in the “third engine” – the aggregation of the South America, Middle East & Africa and China and India & Asia Pacific segments – and is a ‘thriving contributor to growing Stellantis’ revenue targets outside North America and Europe’.
Bio-Hybrid technologies (ethanol)
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By GlobalDataOne of the beneficiaries of this investment are Bio-Hybrid technologies, which combine electrification with hybrid engines powered by bio-fuels (ethanol) on ‘three different levels’. The Stellantis facility in Betim, Brazil is the company’s global centre for Bio-Hybrid technology. Stellantis, under the Fiat brand, pioneered the development and application of bio-fuel engine technology, which used 100% ethanol. In the future, the region will also produce a battery electric vehicle (BEV).
The production of the first vehicles equipped with Bio-Hybrid technology is flexible and can be integrated into various models manufactured by Stellantis. It is compatible with all production lines of the company in the region. The new hybrid and electric technologies are expected to strengthen Brazilian engineering and the domestic industry, Stellantis says.
The Bio-Hybrid technology is supported by three hybrid powertrains that will be gradually produced and introduced to the market. These new technologies include Bio-Hybrid, Bio-Hybrid electrified dual-clutch transmissions (eDCT), Bio-Hybrid Plug-In, and BEV (100% electric). The new hybrid technologies will start to be available by the end of 2024.
Stellantis ‘playing to strengths in South America’
GlobalData analyst Al Bedwell told Just Auto that the latest investment plan makes good business sense for Stellantis. “The region is a strong one for Stellantis, especially bearing in mind the history and presence it has with the Fiat brand. It’s a competitive plus, in global terms, and the company is playing to its strengths there.
“Moreover, the presence there has always been bolstered through bio-fuel tech developed specifically for Brazil. It makes good business sense and is a technological no-brainer for Stellantis to go down that bio-hybrid route as part of its electrification strategy for South America.”
Market leadership
Stellantis is the leader in the three main markets in South America: Brazil, Argentina, and Chile. Last year, Stellantis total sales in the region surpassed 878,000 vehicles, with a 23.5% market share, the company says. The company is the sales leader in Brazil with a 31.4% market share and maintains leadership in light commercial vehicle sales in South America, with a 28.6% market share. Fiat is the best-selling brand in Brazil and South America, and the Fiat Strada pickup is the best-selling vehicle in the country and the region.
With this investment, Stellantis will be increasingly prepared to design, develop, and produce modern cars in the region, while also expanding its business. In Argentina, for instance, the company acquired a 19.9% stake in Argentina Litio y Energía S.A., a significant step toward establishing a cluster of sustainable battery materials to meet the electrification goals outlined in its global plan.
In addition, with the acquisitions of companies Norauto and DPaschoal, Stellantis has become the largest auto parts distributor in South America and has plans to further expand its presence in the aftermarket segment.
