Audi plans to revive vehicle production in Brazil in 2014 as part of its bid to unseat BMW as the world’s largest luxury car maker in terms of sales. Audi plans a BRL500-million ($221.8 million) investment in Brazil by 2016, according to chief executive Rupert Stadler. Audi is expecting to sell around 30,000 vehicles in Brazil by 2018, including imported units.
Stadler said that they expect the Brazilian luxury car market to surge 170 percent in the next few years. He added that Audi is strengthening its position in the Americas, Asia and Europe. Audi’s announcement came a year after BMW disclosed plans to invest EUR200 million ($267 million) on a new Brazilian site, where it seeks to build up to 30,000 vehicles annually starting 2014. BMW is currently on its toes as it staves off aggressive challenges from Audi and Mercedes-Benz, which have both vowed to become the best-selling luxury carmaker in the world.
The No. 3 Mercedes is considering producing vehicles in Brazil, an option which decision will be known by the end of the year, Daimler CEO Dieter Zetsche said during the Frankfurt auto show. Meanwhile, Audi will build the A3 sedan and the Q3 SUV at Volkswagen Group's Sao Jose dos Pinhais site in Brazil, starting next year. Audi commenced producing the A3 at the Sao Jose dos Pinhais site in 1999, but stopped its output in 2006 due to poor sales.
Audi’s expansion in Brazil is part of its bid to widen its production network outside Germany to chase its growth goals and cut its exposure to currency fluctuations. Audi’s two German plants accounted for 75 percent of the carmaker’s output in 2009. According to data from IHS Automotive, the plants are expected to account for only 45 percent of Audi’s production by 2017.