Mercedes-Benz is opening a brand new factory in Brazil, for this they are investing $183 million (500 million reais). At the beginning, in this factory will be made C-class and GLA models, but we may expect more model in the future. Production will start with the C-class, next year, and the production of GLA models will start a few months later.
At first they will produce 20.000 units per year, but because this factory has bigger potential, they are expecting to increase this number in the next year. Also, they announced, that this factory means merging Brazilian and European market, and that with production in Brazil, they can offer more suitable cars to the Brazilian customers.
Mercedes is the first luxury car manufacturer who was producing cars in Brazil. Their first factory was in Juiz de Flora, opened in the 1999. There was production of only A-class, but in the 2010, it was modified to produce commercial trucks. The new factory is located in Iracemapolis, 170km northwest of Sao Paulo, and unusual about it is the low level of automation. It means that 600 jobs places will be opened and more than 3000 for the service providers and regional suppliers.
Brazil is the 4th largest car market in the world, with 3.3 million vehicles sold per year, after China, the US and Japan. Big, luxury cars represent only 1% of yearly sales, sue to high taxes. This high import taxes are the main reason why luxury car manufacturers like, Mercedes, BMW and Audi, are opening factories in Brazil.
In the last year BMW also invested 200 million euros in the factory in Brazil, producing 1 series, 3 series, X1, X3 and Mini Countryman.