Daimler is planning to construct a new Mercedes-Benz plant in Brazil as it tries to tap the growing demand for compact cars in the South American country, chief executive Dieter Zetsche told Stuttgarter Zeitung. The daily cited Zetsche as saying that Daimler would decide this year between two or three locations it had shortlisted in the country.
He said that it would not have been profitable to export compact cars to Brazil. Zetsche told the German paper that Daimler’s new compact offerings are attractive and can be built at low costs, “making them a good fit” for the Brazilian market. He said that it was a question of either producing in Brazil or not to be present there at all in the compact segment, adding that their decision was to “take part."
Daimler defines its compact class as those units in the A-class and B-class as well as GLA and CLA models. According to Daimler in August, it was considering a move to produce vehicles in Brazil, where luxury carmakers are moving to cater to growing demand in the country. The Brazilian government, however, decided to protect local jobs by increasing a tax on foreign-made cars in 2012.