Jaguar Land Rover has abandoned its plans to build a plant in Brazil due to the South American and worldwide economic downturn.

Jaguar Land Rover, the luxury car unit of India’s Tata Motors, aimed at building a plant in Brazil, as part of its plan to make up for the offsetting demand in the U.S. and Europe. But Brazil was hit by both declining local currency and weak foreign demand, which made the premium automakers think again about their plans of investing in the Brazilian market.

Brazil’s government has already found a solution by issuing tax incentives, aimed at encouraging the car manufacturers, and by decreasing taxes on vehicles that have less local parts. It is worth mentioning that about 20% of Brazil’s industrial activity comes from the auto industry.

Jaguar Land Rover already has a plant in Pune, India, where it develops the Land Rover Freelander sport-utility vehicle. The company also plans to share technologies with Tata Motors in India, where a new engine plant will be built. Jaguar Land Rover recently partnered with Chery Automobile to build an engine plant in China.


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