Audi to make decision on Brazil plant in 2013

Audi will decide next year whether to start making cars in Brazil again, following BMW’s plans for a new plant in the country and rumours that Acura and Infiniti are on the way.

According to Audi Brasil boss Leandro Radomile, the project is in its initial phase, with nothing defined yet. Audi’s easiest option would be to adapt one of Volkswagen’s local assembly lines, Radomile added. From 2000 to 2006 Audi manufactured the A3 compact hatchback at a VW plant in the Brazilian state of Parana.

The government decision to protect local jobs by increasing a tax on foreign-made cars and capping auto imports from Mexico, where Audi is building a new plant, has complicated automakers’ plans this year. Audi planned to sell around 5,700 cars in Brazil this year, but according to the new industry regulations it is allowed to import 4,800 vehicles. If Audi wants to import more, it has to face a 30 percent tax increase.

Despite these restrictions, Brazil’s car market continues to grow (it is currently the world’s fourth-largest) and the increasing number of Brazilian millionaires have drawn the attention of luxury carmakers.

In October, BMW announced plans to invest 200 million euros to build a plant in Brazil’s southern state of Santa Catarina. Production is set to begin in 2014 at an annual rate of 30,000 vehicles.