By Ben Tavener, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – German car giant BMW has announced it will open a manufacturing plant in Brazil, with the first Brazil-made cars rolling off production lines by the end of 2014. The announcement was made in a meeting with Brazilian President Dilma Rousseff by BMW’s Ian Robertson, Vice President of Sales and Marketing at the company, who also said that investment by the company will be in the order of €$200 million (around US$261 million).
“We expect to have all the administrative formalities finished in the coming days. Then the plant will begin to be built from April 2013 and the first batch will be manufactured by the end of 2014,” said Mr. Robertson, adding that the plant would produce everything needed for a full assembly line, including casting, welding and painting.
The plant, to be located in Araquari in the southern state of Santa Catarina, will generate 1,000 jobs directly and have an initial annual production capacity of 30,000 cars, potentially later increasing to 80,000 – but this number will “reflect demand.”
Workers will be trained in Germany and in other countries to make sure they are “able to maintain BMW standards,” the company said, adding that its investment plan had received strong government support and was the result of eighteen months’ work.
The government has been trying to tempt foreign car manufacturers to locate in Brazil by offering reduced IPI (industrialized product tax) for those who majority-manufacture their cars in Brazil. The government has also been making buying cars more attractive to Brazilians, by reducing IPI tax to as low as zero on some car models, as well as ensuring easy-access bank loans are available to consumers.
In January, after months of speculation, Jaguar Land Rover also confirmed rumors would be building a factory in Brazil. In October 2011, Renault-Nissan announced it would open a second manufacturing plant in Rio de Janeiro state and expanding production at its current plant in Paraná.
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