Mercedes-Benz is considering setting up a factory in Brazil.
Investment would be driven by the growth of compact cars and an increase in the IPI (Tax on Industrialized Products).
Luxury car manufacturer Mercedes-Benz, part of the Daimler AG group, is evaluating the possibility of producing automobiles in Brazil. With its strategy of growing with compact cars and the increase in IPI (Tax on Industrialized Products) for imported goods, the company may bring a factory to the country – even though the local car market is small for the company.
“This is a matter we are evaluating. Considering the new product platform, there may be viability in having a factory here,” stated Dimitris Psillakis, director of sales and marketing for cars and vans at Mercedes-Benz in Brazil. The company already has a 2,8 million square meter base in Juiz de Fora (MG) for the production of commercial vehicles, such as trucks, where it produces 75 vehicles per year. “We have a 55-year relationship with Brazil,” the executive emphasized.
BMW, a German company and direct competitor of Mercedes-Benz, is also evaluating the possibility of building a plant in Brazil. The MDIC (Ministry of Development, Industry and Trade) confirmed last week that it had received a proposal from the automaker to establish a factory in the country.
Following the announcement of a 30 percentage point increase in the IPI (Tax on Industrialized Products) for products with less than 65% of their parts manufactured domestically, companies have been evaluating the possibility of establishing themselves in Brazil. The Chinese company JAC Motors has already shown interest in producing locally. The Japanese company Nissan announced earlier this month the construction of a factory in Resende, Rio de Janeiro, with investments of R$ 2,6 billion.