Linglong scraps €1bn Brazil tire plant project after partner talks collapse

Chinese tire giant Shandong Linglong Tire Co. Ltd has pulled the plug on its planned €1 billion investment in a Brazilian tire manufacturing plant after failing to reach agreement with its proposed partner on core terms. In a 27 May filing to the Shanghai Stock Exchange, Linglong stated the project was “no longer in a position to proceed as scheduled” because the two parties “failed to reach consensus on core clauses such as shareholding ratio and cooperation conditions.” The joint venture, initially announced in April 2025 with Paraguay-based tire distributor Sunset SA Comercial Industrial Y De Servicios, was slated to produce 14.7 million high-performance radial tires annually alongside a 35MW photovoltaic power station. Both sides have now “reached consensus on terminating the cooperation,” with follow-up procedures pending internal approvals. Linglong emphasized the decision was a “prudent” move driven by “changes in the market environment, strategic adjustment by the company and actual operating conditions.” Crucially, the project had not yet entered substantive construction, meaning the termination “will not have an adverse impact” on the company’s operations. Currently, Linglong operates five production bases in China and two overseas facilities, with plans to continue “intelligent upgrading and transformation” of existing plants to boost capacity utilization. The company also highlighted its ability to “flexibly allocate production capacity between bases” to maintain supply chain resilience and operational flexibility. Linglong confirmed it would “accelerate site selection work for other overseas factories” while advancing its “three upward” strategy—”brand upward, product upward and channel upward”—to strengthen its global market presence and reputation.