Audi to decide next year on resuming production in Brazil

Article by Anita Panait, on December 14, 2012

Audi will determine in 2013 whether to resume building vehicles in Brazil, after German rival BMW announced a plan for a new site in the country and following reports that Japanese brands Acura and Infiniti are headed to the nation. Head of Audi's Brazilian division, Leandro Radomile, disclosed that they are in the project's initial phase, “without anything defined."

Radomile said that the easiest option to Audi’s output resumption in Brazil would be to adapt one of parent Volkswagen's local assembly lines. From 2000 to 2006, Audi built its A3 hatchback at a VW site in Parana, Brazil. The Brazilian government muddled carmakers’ plans this year by increasing a tax on foreign-made cars and limiting imports from Mexico, where Audi is constructing a new plant. Audi intended to sell around 5,700 cars in Brazil in 2012, but new regulations for the auto industry in the country only allow it to import 4,800 vehicles without facing a 30 percentage-point tax increase.

Despite the increase in taxes, the Brazilian car market, regarded as the fourth largest in the world, continues to post strong growth while other markets like Europe and the United States experienced declines. Luxury car makers have been flocking to Brazil, attracted by the growing number of millionaires in the country. Honda said in October 2012 that it intends to sell its Acura brand in Brazil starting in 2015.

Nissan, on the other hand, announced last month that it would begin selling its Infiniti brand in 2014. Jaime Ardila, General Motors Co.'s South American chief told reporters at the Sao Paulo auto show this year that “the rich are becoming richer in Brazil,” remarking further that it is time to start thinking about bringing the Cadillac to the country. In October, BMW disclosed it planned to invest EUR200 million ($261 million) to construct a plant in Santa Catarina, Brazil and commence building 30,000 vehicles per year by the end of 2014.

Topics: audi, brazil, production

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