Peru Invites Chinese EV Maker BYD to Establish Assembly Plant

Peru’s President Dina Boluarte invites Chinese electric vehicle maker BYD to set up an assembly plant in Peru, leveraging the soon-to-open Chancay port and offering zero tariffs to stimulate local investment.

Peru’s President Dina Boluarte has invited Chinese electric vehicle (EV) manufacturer BYD, urging them to consider establishing an auto assembly plant on the Pacific coast of Peru. This proposal is part of a broader strategy to enhance industrial growth and capitalize on the emerging infrastructure to facilitate trade between Peru and China.

During a meeting with BYD executives, Boluarte highlighted the strategic advantages of setting up operations in Peru, particularly with the Chancay port under construction by Cosco Shipping Ports. Set to open in November, this massive port project is expected to significantly boost trade efficiency and capacity, presenting an ideal opportunity for BYD to expand its footprint in South America.

President Boluarte underscored the importance of strategic location for BYD’s potential assembly plant. She mentioned constructing an industrial park in Chancay or Arequipa, which lies approximately 620 miles to the south along the Pacific coast. Both locations offer unique advantages for establishing a robust vehicle assembly industry.

“In either of those places, that’s where the vehicle assembly industry could be setting up,” Boluarte stated. The choice of Chancay is particularly appealing due to its proximity to the new port, which will facilitate easy access to international markets and streamline the logistics of exporting vehicles. Arequipa, on the other hand, offers a well-established industrial base and strategic coastal access.

China has emerged as the largest investor in Peru, particularly in the mining sector. As the top buyer of Peruvian copper, China plays a crucial role in Peru’s economic landscape. Boluarte’s invitation to BYD aims to build on this robust economic relationship by encouraging Chinese companies to invest more deeply in Peru’s manufacturing sector.

Promoting Local Industrial Growth

President Boluarte emphasized that bringing production facilities to Peru, rather than merely exporting raw materials like copper and lithium, would create significant economic benefits for the country. She highlighted the government’s commitment to supporting such investments through favorable policies, including offering zero tariffs to encourage local investment.

“Instead of bringing copper and lithium from Peru, they should come to Peru to set up their assembly industry,” Boluarte stated. This approach is designed to foster local industrial growth, create jobs, and enhance technological capabilities within the country.

The government’s plan includes substantial investments in infrastructure and industrial parks, ensuring potential investors access to the necessary facilities and logistical support. The aim is to create an environment where manufacturing industries can thrive, contributing to Peru’s economic development.

Transition to Electric Transportation

In addition to promoting local industrial growth, Peru is considering an ambitious plan to replace its public transportation fleet with electric models over the next three to four years. This initiative aligns with global trends towards sustainability and reduced carbon emissions, positioning Peru as a leader in green transportation in Latin America.

The proposed agreement with China would facilitate this transition, providing access to advanced electric vehicle technology and expertise. By collaborating with BYD, a leader in electric vehicle manufacturing, Peru hopes to accelerate the adoption of electric transportation solutions, reduce dependency on fossil fuels, and address urban pollution challenges.

Boluarte’s vision includes comprehensive support for the transition from infrastructure development to policy incentives. This includes building charging stations, providing subsidies for electric vehicles, and implementing regulations that favor green transportation. The goal is to create a sustainable and efficient public transportation system that meets the needs of Peru’s growing urban population.

Strengthening Sino-Peruvian Relations

Peru’s invitation to BYD is part of a broader effort to strengthen economic and diplomatic ties with China. Peru aims to diversify its economy and reduce its reliance on raw material exports by fostering closer collaboration in key sectors such as automotive manufacturing and green technology.

The Chancay port project, a significant Chinese investment, exemplifies the potential of Sino-Peruvian cooperation. Once operational, the port will enhance Peru’s connectivity to global markets, attract foreign investment, and stimulate regional economic growth. It will also be a critical hub for exports, including manufactured goods and agricultural products.

Boluarte’s administration is committed to creating a favorable investment climate for Chinese companies, ensuring they have the support and resources needed to succeed. This includes transparent regulatory frameworks, competitive tax policies, and robust infrastructure development.

President Dina Boluarte’s invitation to BYD reflects a strategic vision for Peru’s economic future. By encouraging the establishment of an auto assembly plant, promoting electric transportation, and strengthening ties with China, Boluarte aims to drive industrial growth, create jobs, and enhance Peru’s technological capabilities.

The success of these initiatives will depend on effective implementation, collaboration with international partners, and a supportive policy environment. As Peru prepares for this transformative journey, the potential benefits for the economy and society are immense, positioning the country as a dynamic player in the global market.

Also read: Peru’s New Marine Reserve Supports Sustainable Fishing and Economic Growth

Peru’s efforts to attract investment, foster industrial growth, and embrace sustainable technologies represent a forward-looking approach that aligns with global trends. By leveraging its strategic location, rich natural resources, and strong international partnerships, Peru is poised to achieve significant economic development and improve the quality of life for its citizens.