Chinese commercial vehicle manufacturer Beiqi Foton Motors Co signed an agreement with US engine manufacturer Cummins Inc on June 5 to jointly explore the Brazilian market. Foton will partner with Cummins to build two knock-down-part plants in this country by 2014.

The new plants in Brazil will produce light trucks and pick-ups for the South American market, but the annual production capacity is not yet decided. Cummins now has a local plant with annual production capacity of 30,000 engines.

Earlier this week, Foton also signed an agreement with Cuba Ministry of Transportation to start a demonstration project of its new energy vehicles.

Till now, Foton has set up overseas branches in India and Russia and has built KD plants in more than 20 countries.

It will bring the whole fleet to the Cuban market including vans, light trucks and pick-ups in the next few years, the company says.

Foton and Cummins already have cooperation projects in the Chinese market with a joint-venture engine plant producing 400,000 engines every year. These engines are installed to Foton’s high-end heavy-duty trucks, Auman GTL, which are mainly exported to the European market.

According to a report from Roland Berger Strategy Consultants, Brazil has grown to be the fourth largest vehicle market in the world, after China, the US and Japan. The consultancy also forecasts that this year vehicle sales in Brazil will reach 3.7 million, up by 8.8 percent year on year.

Analysts say that Brazil will improve its infrastructure before the 2014 World Cup and the 2016 summer Olympics, which will generate more demands for commercial vehicles such as trucks and pick-ups.

The equal tax policies on foreign and domestic automakers in Brazil will add further attraction to foreign companies to invest in Brazil, Roland Berger says.

Contact the writer at wangchao@chinadaily.com.cn