Mercedes will produce the new C-Class and GLA at a plant in Brazil
|   Saturday, October 05, 2013
Brazil is becoming more and more tempting for premium manufacturers eager to use cheap labor and a market in constant development. After Audi has decided to produce the Audi A3 sedan and Q3, another German premium manufacturer focuses on Brazil.

We are talking about Mercedes, which officially announced the opening of a factory in the town of Iracemapolis, near Sao Paolo. The plant will begin operations in 2016 and will be responsible for the production of two very important models.
The models in question are the new generation C-Class and the new GLA compact crossover the Germans exhibited this fall in Frankfurt.

The Mercedes plant will generate 1,000 jobs, and will work another 3,000 people paid by the suppliers involved. The foreseen production should reach up to 20.000 vehicles each year.

The factory in Iracemapolis involves an investment of 170 million euros. This is added to the other two Mercedes plants in Brazil, Minas Gerais and Sao Paulo, which give life only to commercial vehicles, buses and trucks.

With the completion of the new Brazilian plant, Mercedes will have plants in Germany, U.S., Hungary, South Africa and China. There are also CKD and SKD assembly plants in Egypt, Indonesia, India, Thailand, Malaysia as well as Vietnam.

"Brazil is an important future market. With our local production we accept the challenge and take on the competition," Andreas Renschler, said Mercedes production head in a statement.

"The Brazilian market is quite sealed off," Heinz Gottwick, a Daimler spokesman, said. "The local production helps us offer our vehicles on reasonable terms."
With about 3.8 million vehicles sold last year, Brazil is presently the 4th largest car market in the world following China, the United States and Japan.

Frank Biller, analyst at LBBW from Stuttgart, said that the light-vehicle market in Brazil will rise by 4.5 percent on average between 2012 and 2016, with higher growth rates starting in 2014 after the weaker demand this year.

"The political and economic environment seems to be stabilizing in Brazil," Biller said. "With the more positive circumstances, it seems that the carmakers can make good business with a local production. The 2014 soccer World Cup, and 2016 Olympic Games will add to a positive sentiment among consumers in the country, which is hosting the sporting events."

CEO Dieter Zetsche has promised to reclaim the No. 1 position in worldwide premium sales by the end of the decade after losing the top place to BMW in 2005 and second place to Audi in 2011.

Meanwhile, BMW plans to start production in Brazil's southern state of Santa Catarina next year and plans on investing 200 million euros in the new facility. The target is assembling at least 30,000 vehicles in Brazil annually.

Audi claimed last month that it will invest 225 million dollars in Brazil through 2016. A new plant in Sao Jose dos Pinhais in the state of Parana will begin assembling the A3 sedan in 2015, followed soon by the Q3 SUV in early 2016. Audi plans on selling g 30,000 cars in Brazil by 2018, including imported cars.
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