Posted Oct 26th 2012 3:00PM
BMW has announced plans to invest 200 million euro (CAD$257 million by current exchange rates) in a facility in Brazil. The move is an effort to counter Audi in one of the world's quickest-growing markets. BMW says it plans to produces upwards of 30,000 units a year at the Santa Catarina factory by 2014, though that number could swell significantly if the automaker sees the demand. Audi, meanwhile is set to build 150,000 vehicles per year at its location in San Jose Chiapa, Mexico. Reports indicate that automakers are looking outside of the contracting European and slowing Chinese markets in search of more sales.
Ian Robertson, member of the BMW board said, "Brazil is a market with tremendous potential for the future for the BMW Group. For that reason, we are strengthening our long-term commitment to this country."
BMW has focused on emerging markets to help step up sales by 20 per cent by 2016. The automaker originally announced its plans to build construct a facility in Brazil in 2011, but the move was postponed due to shifts in the country's tax codes. Now Brazil is offering new tax brakes to any carmaker that aims to invest the area.
Scroll down to read the full BMW press release.
BMW Group plans plant in Brazil
Start of production scheduled for 2014
Planned capacity of approx. 30,000 units per year
Planned investment of more than 200 million euros
Munich/Brasilia - October 22, 2012... The BMW Group plans to build a new plant in Brazil. "We welcome the new framework for investments in Brazil, based on the recently adopted "Inovar Auto" legislation. We have submitted an investment proposal for our planned new plant to the Brazilian Government," said Ian Robertson, Member of the Board of Management, responsible for Sales and Marketing BMW, at a meeting with Brazilian President Dilma Rousseff in the capital, Brasilia, on Monday.
Subject to final approval of the plans by the Brazilian Government, the goal is for production to begin in 2014. Investments over the next few years will total more than 200 million euros. Plans call for a production capacity of approximately 30,000 vehicles per year. More than 1,000 new jobs will be created at the new production site – as well as additional jobs within the supplier network as a result of the new plant. Negotiations with the State Government of Santa Catarina are already well underway for the new facility in the Joinville region.
"Brazil is a market with tremendous potential for the future for the BMW Group. For that reason, we are strengthening our long-term commitment to this country," Robertson explained. "This will create the necessary conditions for us to maintain the balance of sales between Europe, Asia and the Americas – and, therefore, for the long-term success of our company. With this move, the BMW Group is applying its strategic principle of 'production follows the market', which has already proved successful in markets such as the U.S., China and India."
The new plant in Brazil will extend the BMW Group's production network which currently comprises 29 production and assembly facilities in 14 countries. The company has been manufacturing BMW motorcycles at its Manaus location since 2010.
The BMW Group has had a local sales company in Brazil since 1995. A total of 15,214 vehicles were sold in Brazil in 2011. This represents a growth rate of almost 54%. BMW Motorrad also increased its sales by 55% in 2011 to reach a total of 5,442 motorcycles.