By Alberto Alerigi
SAO PAULO, Sept 17 German automaker Volkswagen
AG will soon announce investments of 1.2 billion
reais ($529 million) in Brazil to begin local assembly of its
newest Golf model and restart local production by its Audi
premium division, a spokesman for the state of Parana told
Audi Vice President Bernd Martens confirmed the unit's
investment after meeting with President Dilma Rousseff in
Brasilia on Tuesday, a part of the carmaker's overseas expansion
to catch up with luxury-market leader BMW.
Audi's move follows steps by the Brazilian
government to raise taxes on imported vehicles while offering
tax breaks for carmakers that increase domestic investments.
Instead of building an all-new plant in the world's No. 4
auto market as German rival BMW did, Audi will invest 504
million reais to expand facilities at VW's factory in São Jose
dos Pinhais, outside the capital of Parana, according to the
state government's spokesman.
Ingolstadt-based Audi expects to start production in Brazil
in 2015 and produce 26,000 of the compact A3 annually within
three years, he said. The plant will also produce the Q3 compact
SUV. Next week, VW will also announce an investment of 700
million reais to prepare for the production of its new Golf
model at the factory, according to the spokesman.
Volkswagen's press office in Brazil declined to comment on
potential investment in Golf production.
BMW said in October that it would spend 200 million euros
($267 million) on a factory in Brazil's southern state of Santa
Catarina and start production there in late 2014, with the goal
of making about 30,000 vehicles per year in the country.
Rising wages, especially for scarce, highly skilled
professionals, have made Brazil a bright spot in the global
market for luxury goods. But both Honda Motor Co Ltd
and General Motors Co have said luxury car sales in
Brazil are still too slim to consider making it a base for
producing their upmarket offerings.
Brazil is not uncharted territory for Audi. It first entered
the market in 1999, when it started building the A3 at the
Parana plant jointly developed with VW. Audi stopped its
assembly line at the plant in 2006.
To meet its goal of replacing BMW as the world's
best-selling premium carmaker by the end of the decade, Audi is
now expanding globally. The brand broke ground for a new plant
in Mexico in May and will open one a factory in Foshan, China,
later this year.