Part V — Getting to Market (Distribution)
Source:
lecar/212/research/grupos-concessionarias.md(deep research, 15/06/2026, adversarially verified) +rede-concessionarias-uf.md. Every number carries source + year; gaps marked 🚩.This is the part that answers BAW’s open question: enter through a partner (Lecar-style) or build an own dealer network? The short answer, backed by the revealed behavior of every recent Chinese entrant, is in §29.
23. How distribution actually works in Brazil
Section titled “23. How distribution actually works in Brazil”A foreign OEM does not sell cars to the public. It sells cars to a concessionária (a franchised dealer), and the concessionária resells to the consumer. The dealer is an independent business that buys the vehicle, takes it into its own inventory, and earns on the resale — it is not an agent earning a commission (see §25, this is the single most misunderstood point for entrants).
Three things follow from this and shape every later decision:
- You need a network of independent businesses, not a sales force. Capillarity across a continental country is rented from people who already have it.
- The relationship is governed by federal law (the Lei Ferrari, §24), not just by contract. It is harder to start, change, or end than in most countries.
- Capital efficiency is the whole game. The dealer funds the showroom, the inventory (via floor-plan financing, §25), and the local workforce. That is why a new OEM can cover Brazil without building real estate — if it can attract dealers.
24. The Lei Ferrari (Law 6.729/1979) — what governs OEM ↔ dealer
Section titled “24. The Lei Ferrari (Law 6.729/1979) — what governs OEM ↔ dealer”The OEM–dealer relationship is regulated by the Lei Ferrari (Lei 6.729/1979), named after the congressman who authored it. It exists to protect the dealer (the weaker party) from the OEM. Key features an entrant must understand:
- Territorial exclusivity / “área de atuação.” Dealers are assigned operating areas; the OEM cannot freely flood a territory with competing points of its own brand. The STF (Supreme Court) upheld the Lei Ferrari and maintained dealer territorial exclusivity (reported Apr/2026 — Mecânica Online). Its constitutionality had been challenged (TozziniFreire); the law stands.
- Termination is costly. The law constrains how an OEM can end a dealership and provides for indemnification — you cannot appoint and de-appoint at will.
- Tension with new channels. Direct sales, agency models, and e-commerce sit in tension with exclusivity; the market is adapting but the protections did not disappear (MoveNews).
🚩 Gap to close (priority). The mechanics — exclusivity scope, area-of-operation rules, indemnification on termination, and specifically what changes for a brand-new OEM building a network vs. appointing existing groups — need a dedicated legal pass on Law 6.729/79 itself + the 2026 STF decision. Flagged in the research file; this chapter will be hardened with primary legal sourcing before it goes to BAW as final.
Why this matters for the entry decision: because exclusivity is real and termination is expensive, who you appoint first is a near-permanent choice. That raises the value of getting the network design right the first time — an argument for a guided/orchestrated entry rather than improvising.
25. “Repasse” is not commission — how the dealer actually earns
Section titled “25. “Repasse” is not commission — how the dealer actually earns”The most common misunderstanding by entrants. The dealer’s economics:
- Buy-and-resell margin. The OEM invoices the car to the dealer at a dealer price; the dealer resells at the public price (preço público). The spread is the dealer’s gross margin — there is no per-unit commission paid by the OEM.
- Floor-plan financing (“floor plan” / “estoque”). The dealer finances its inventory through a bank line, paying interest while the car sits on the lot. This is why inventory turn and OEM wholesale discipline matter enormously to dealer profitability.
- The real profit pools are not the new-car margin. New-car gross is thin; the dealer makes money on after-sales (parts + service), F&I (financing & insurance commissions), and used cars. A new brand with weak parts logistics or no financing partner is unattractive regardless of the car.
- Chinese brands are disproportionately profitable for the dealer. At Automob (Brazil’s largest group), Chinese brands were 8.4% of revenue but ~22% of gross profit (2025, InvestNews). This is the economic reason a group wants a Chinese entrant — and the lever BAW pulls to attract one.
Takeaway for BAW: to win dealers you must offer (a) a car that sells, (b) healthy dealer margin, (c) functioning parts logistics, and (d) a financing partner. Three of those four are after the showroom — they live in Part VI.
26. Brand exclusivity and what it constrains
Section titled “26. Brand exclusivity and what it constrains”Under the Lei Ferrari regime, a dealer point is tied to a brand and a territory. But multi-brand groups are the norm — a single group operates many separate franchised points, each under its own flag. Crucially, top groups already stack multiple Chinese brands at once:
- Barigui = BYD and Omoda/Jaecoo; Toriba / Carrera / Germânica = GWM and Omoda/Jaecoo (2025, AutoData).
So carrying one more Chinese entrant (BAW) is normal behavior for these groups — there is no taboo, and co-existence with Lecar is plausible rather than mutually exclusive. The constraint to watch is direct conflict at the same price point in the same territory (a group already holding a competing premium Chinese SUV in a given area), not multi-brand per se.
27. Brazil’s dealer groups — who’s who
Section titled “27. Brazil’s dealer groups — who’s who”The owners of the network (distinct from the brands mapped in rede-concessionarias-uf.md).
#1, confirmed: Automob (AMOB3, controlled by Simpar). ~197 dealerships / 38 brands (137 light-vehicle stores), R$12.6 bn revenue, R$536 mn adjusted EBITDA (LTM-Sep/2025, AutoData 28/11/2025). Grew from R$700 mn (2021) to R$10 bn+ via an acquisition roll-up; IPO’d Dec/2024. Carries five Chinese brands: GWM, BYD, Caoa Chery, GAC, Leapmotor. Listed on B3, so financials are audited. (Caveat: store counts vary by source 188/196/197; posted a net loss in Q3-25 — it is an accelerating roll-up, cite the period.)
Strong regionals turning multi-state (the layer that matters outside São Paulo):
| Group | Base | States (auto) | Scale | Chinese brands |
|---|---|---|---|---|
| Saga | Goiânia/GO (1972) | GO, MT, MG, DF, RO | 110+ stores, ~20 brands | BYD, Leapmotor, Geely |
| Barigui | Curitiba/PR (1993) | PR, SC | ~60 stores, 15 brands — largest in the South | BYD + Omoda/Jaecoo |
| Carbel | Belo Horizonte/MG | MG (largest in state) | large | BYD |
| Itavema | São Paulo/SP (1969) | SP, RJ | 20+ stores, 12 brands | BYD (early adopter, Aug/2022) + Geely |
| Disbrava | — | TO, MT, PA, MA | multi-brand | BYD |
| Grand Brasil | SP | SP (+?) | large | BYD |
| Via Porto | RS | RS, SC | — | BYD |
| Via 1 / Viasul | NE | BA, PE, CE | — | BYD |
Source: deep research file, primary group sites + OEM releases. Some “brands” are motorcycles/trucks — discount those for passenger-car count.
🚩 Gap: a consolidated, dated ranking of the top 5–10 by revenue/store-count does not exist publicly (likely behind the FENABRAVE / Automotive Business / Revista Dealer paywall). Automob is the only confirmed #1; the rest of the order is open.
28. Recruit dealers vs own network vs direct sales
Section titled “28. Recruit dealers vs own network vs direct sales”The revealed pattern: every recent Chinese entrant rented capillarity by appointing existing groups. None built greenfield.
| Brand | Entry move | Year | Source |
|---|---|---|---|
| GWM (direct Tank 300 rival, same price band) | Appointed 28 existing groups for up to 50 points, national coverage, R$1 bn, 35 exclusive areas → 87 points in 50+ cities by Nov/2024 → ~130 in 2025 | 2022 | AutoData / vrum / GWM newsroom |
| BYD | Announced 13 new groups targeting 200+ stores | 2024 | AutoData |
| Omoda & Jaecoo (Chery) | Appointed 30+ groups across 40 cities / 17 states, 50+ own-flag stores | 2025 | AutoData |
The 28 GWM groups are, in effect, the ready-made target list of dealers with proven appetite for a premium Chinese SUV — the closest analog to BAW. They span all five regions (see the research file’s group×region table) and include large multi-brand houses (Dahruj, Simpar, Canopus, Bamaq, Newland, Dimas, Divesa/Zacarias, Toriba, Carrera, Líder, Germânica…).
Direct sales (vendas diretas) to fleets and government exist as a parallel channel (lower margin, volume, less brand-building) and can seed early volume while the retail network forms — but they do not replace a dealer network.
29. The decision: partner (Lecar-style) vs own network vs hybrid
Section titled “29. The decision: partner (Lecar-style) vs own network vs hybrid”| Dimension | Own network (greenfield) | Appoint groups directly | Partner (Lecar-style) |
|---|---|---|---|
| Capital | Highest — real estate, inventory, staff on OEM | Low — dealers fund showrooms | Lowest — partner fronts entity + import + network |
| Time to coverage | Slowest (years) | Fast (GWM: national in ~1 year) | Fast — partner already structured |
| Control over brand | Highest | Medium (Lei Ferrari constrains) | Shared with partner |
| Regulatory / homologation load | All on OEM | All on OEM | Carried by local partner |
| Risk | Highest | Medium | Lowest — local partner absorbs entry risk |
| Precedent | Nobody chose this | GWM, BYD, Omoda | The Lecar proposition |
The strategic read for BAW. Building an own network from scratch is the path no recent Chinese entrant chose — the market has validated “appoint existing groups” three separate times (GWM, BYD, Omoda). That collapses BAW’s real choice to two live options:
- (a) Appoint groups directly — proven, fast, but BAW carries the entity, homologation, import, tax, parts, and financing load itself (all of Parts II–IV and VI), and must learn the dealer-management game cold.
- (b) Enter through a local partner (Lecar-style) — the partner already holds the manufacturing footprint, MOVER eligibility, ICMS incentive, homologation track, and import operation; BAW plugs product into a running entity and a forming network.
Either way, someone has to do the orchestration — the entity, the homologation, the tax engineering, the network design that the Lei Ferrari makes near-permanent. The question is whether BAW builds that capability in-house or buys it. That is the bridge to Part VIII (§42, the role of a local orchestrator).
Honest caveat. The partner-vs-direct choice is not purely economic — it turns on how much control BAW wants and how much entry risk it wants to hold. This chapter frames the trade-off; it does not pretend the answer is the same for every OEM.