By the turn of the 80s Engesa had thousands of employees and two factories. The national arms industry was reaching new heights and both Engesa and Avibras were growing ambitious. The former was expanding its workforce, forming subsidiaries and delving into new fields. Newfound interest in tanks would seal its fate.
At the time the Army was interested in a new tank model, but not a main battle tank. This reflects its attitude to motorization in general: it took until 1973 to retire the last horse-moved units, and the central argument for their preservation was the country’s vast, difficult terrain lacking road coverage, its lack of an industrial base and the need to import fuel. By now the Army was fully motorized and those points were no longer true, but Petrobras couldn’t achive oil self-sufficiency and neither the roads nor industry were stellar. Hence, it wanted cheap and lightweight tanks.

The first wave of tanks in national service were American-provided M3 Stuarts and M3 Lees. In 1960 M41 Bulldogs were acquired, and a fleet of about 350 were kept. The Stuarts were to be reused in the failed Carcará program, while the Bulldogs were successfully modernized by Bernardini and the Army Technological Center (CTex) into the M41 Caxias version, which wasn’t much better but had 5 times the operational range. Even then it was already obsolete by the 80s. Now the military wanted the arms industry to develop a M41 successor. Its requirements took into account the country’s highways, railways and bridges: a maximum of 30 (or in some sources, 36) tons and 3,2 m of width. It also wanted something simple, compatible with existing equipment and without a great reliance on foreign parts. Bernardini took on the challenge, and, together with CTex, developed the Tamoyo. It weighed 31 tons and was 3,2 m wide and 2,5 m high – a low silloutte. It had three versions. The Tamoyo I had a nationally produced 550 hp Scania DSI 14 engine, the M41’s 90 mm gun and transmission and light armor. The Tamoyo II considered reaching foreign markets and had the M2 Bradley’s transmission. The Tamoyo III was designed with recommendations from a foreign armor specialist. Its engine was the then-incomplete Detroit Diesel 8V92TA, which had 750 hp but could in the future reach 900-1000 hp. To sustain it, the M60’s transmission was adopted. A 105 mm gun, steel-ceramic armor and modern electronics and fire stabilization systems were installed.
During tests one Tamoyo drove over a VW Brasília and killed two people in 16 January 1985.
Loss of interest, budget cuts and competition led to the project’s failure.