Daimler to build Mercedes plant in Brazil: magazine

FRANKFURT Sun Aug 4, 2013 7:50am EDT

The bonnet emblem of a Mercedes-Benz car is pictured in a dealership of German car manufacturer Daimler in Munich May 17, 2013. REUTERS/Michaela Rehle

The bonnet emblem of a Mercedes-Benz car is pictured in a dealership of German car manufacturer Daimler in Munich May 17, 2013.

Credit: Reuters/Michaela Rehle

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FRANKFURT (Reuters) - German carmaker Daimler (DAIGn.DE) plans to build a new plant in Brazil as rising taxes on foreign vehicles make it more difficult to sell imported cars in the Latin American country, a magazine reported on Sunday.

Daimler's luxury brand Mercedes-Benz is to begin assembling C-Class model cars in Brazil by 2015, with a starting capacity of about 20,000 vehicles per year, German weekly Der Spiegel reported, without saying where it got the information.

A spokesman for Daimler said the company was considering such a move but had made no decision yet. "We are looking at Brazil, just like various other locations," he said.

Luxury carmakers are flocking to Brazil in an attempt to exploit growing demand there. Brazil's government complicated their plans, though, with a drive to protect local jobs by increasing a tax on foreign-made cars last year.

BMW (BMWG.DE) announced plans for a new assembly plant in Brazil last October and Audi (VOWG_p.DE) is to decide next year whether to start making cars in Brazil.

Setting up a new plant in Brazil would not be Daimler's first foray into the world's fourth-biggest auto market. It made the Mercedes-Benz A-Class in its Juiz de Fora plant from 1999, making it the first luxury carmaker to build vehicles in Brazil.

But it ceased car production there in December 2010 and refitted the site for the manufacture of commercial trucks.

Der Spiegel said on Sunday that Daimler would decide in the coming months where in Brazil to build the new plant.

(Reporting by Maria Sheahan and Jan Schwartz; Editing by Pravin Char)

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