After previous reports that Mercedes-Benz is preparing to enter the Brazilian car market with a local production site, a person familiar with the company’s plans is backing this news, revealing that Mercedes-Benz, the world’s third-biggest maker of luxury cars, plans to build a factory in Brazil to compete locally with BMW and Audi.

Mercedes could actually announce as soon as today its plans to restart vehicle manufacturing production in South America’s biggest economy from 2016, said the source, who asked his identity remain confidential as he is not allowed to speak ahead of the official announcement.

The new plant, located in the state of Sao Paulo, will build the mid-sized C-Class and GLA compact sport-utility vehicle, the person revealed. Daimler, also the world’s largest truck maker, stopped local production of cars two years ago in the Brazilian state of Minas Gerais, converting the plant to manufacture instead its commercial vehicles.

The German carmakers are opening new assembly plants to circumvent higher import duties that limit their growth in the country. BMW plans to start production in Brazil’s southern state of Santa Catarina next year and is investing 200 million euros ($271 million) in the new production facility. Audi also revealed last month that it aims to revive vehicle production in Brazil with an investment of 500 million reais ($225 million) through 2016.

Via Bloomberg


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