Daimler plans to resume Mercedes production in Brazil

Article by Anita Panait, on October 2, 2013

Daimler is planning to resume production of Mercedes-Benz vehicles in Brazil in 2016 and to construct a site in the country, a person privy with the matter told Bloomberg. The source said that the German carmaker is expected to announce its plans for Brazil soon. Daimler’s new site is located in the state of Sao Paulo and will build the mid-sized C class and GLA compact sports utility vehicle.

Daimler stopped building cars in Minas Gerais, Brazil two years ago and has converted the site to assemble commercial vehicles. Daimer chief executive Dieter Zetsche has vowed to reposition Daimler as the largest premium carmaker in the world in terms of sales by 2020, after giving up the crown to BMW brand in 2005 and ceding second place to Audi in 2011.

Luxury carmakers are setting their sights on Brazil to take advantage of the growing demand in the country. BMW and Audi have also disclosed plans for Brazil.

The new plants will allow the carmaker to bypass high import taxes that have been limiting their growth in the country. BMW intends to commence output in Santa Catarina, Brazil, in 2014 and is investing EUR200 million ($271 million) in the new site. Audi is also planning to revive vehicle production in Brazil with an investment of EUR500 million ($225 million) through 2016.

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