Sunday, 8 February 2015

Mercedes adds C-Class production in Brazil

Mercedes-Benz is adding production of the C-Class in a new plant in Iracemapolis, near Sao Paulo, Brazil,

Daimler AG, which owns Mercedes-Benz, has just broken ground on the new plant where production is due to start in the first quarter of 2016 with the C-Class sedan.

This model will be followed with production of the GLA sport-utility vehicle (SUV) as well.

“Local production will even better allow us to tap the potentials of the emerging Brazilian market and to respond more flexibly to the wishes of our customers. In the first stage, we are aiming for an annual capacity of 20,000 vehicles. If the market will develop as hoped for, the plant has the potential for a further significant expansion in the future,” noted Markus Schafer, member of the divisional board of Mercedes-Benz Cars, Manufacturing and Supply Chain Management.

The plant is expected to open up 600 jobs, but also to have significantly less automation than other facilities.

One implication of the latest move is that Mercedes-Benz is returning to passenger car production in the region, having built the A-Class in Brazil from 1999 to 2010 at its Juiz de Fora plant, a facility that plant now builds commercial vehicles.

Forecasts of the volumes likely to be generated from the plant are in the range of about 11,000 units a year through this decade, split roughly evenly between the two products.

Audi and BMW are among the luxury makers adding production in the country as well as Mercedes-Benz. Brazil’s Innovar Auto taxation programme makes in-country production advantageous at present, even at low volumes.

Mercedes-Benz first announced its plant in 2013. Despite the decline in sales anticipated for 2015, Brazil is expected to return to growth in 2016 and remains the fourth-largest single market.

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