Mercedes-Benz has begun working on the land for its new factory in Iracemapolis, Sao Paoulo (Brazil), according to a local news report. Mercedes-Benz Brazil president Philipp Schiemer confirmed that work has begun; the factory is expected to begin production at the end of 2015 with annual capacity of 20,000 units. The company is investing BRL500 million (USD226.8 million, 28 August 2014) in production of the C-class sedan and GLA sports utility vehicle.
Significance: Despite Brazil’s very difficult 2014, future prospects for the country look bright. Additionally, the country’s tax policies heavily encourage local production, particularly for luxury makes subject to higher import taxes. The plant investment was announced in October 2013. This is also Mercedes-Benz’s second go at passenger-car production in Brazil, which it did from 1999 to 2011, before converting the Juiz de Fora plant to truck production. IHS Automotive forecasts production at the new facility will be roughly even between the GLA and C-Class, after the first year, in which more GLAs are forecast to be built than C-Class sedans.
