Chinese vehicle manufacturer Beiqi Foton Motor's Brazilian subsidiary has presented the time frame for completion of construction of a new assembly plant in Brazil, according to local media reports. Foton do Brasil's new factory is to be located in Guaiba, Porto Algre, and construction is reportedly already under way, with vehicle production due to start in the first half of 2016. Foton is investing BRL250 million (USD95 million) in the facility, which is expected to have an annual production capacity of 21,150 trucks. Reportedly, Foton has already received an environmental licence for the facility and has confirmed the project qualifies under the Brazilian government's Inovar-Auto incentive programme, which will lower taxes on trucks sold.
Significance: IHS Automotive forecasts that Foton will slowly increase the new plant's production capacity to 21,000 units, with production forecast to remain below 1,000 units per annum (upa) through 2020. Meanwhile, Scania, a Volkswagen brand, built about 17,700 units in Brazil in 2014, with production forecast to reach 21,000 upa by the end of the decade. Production of medium and heavy commercial vehicles in Brazil is forecast to reach 245,000 units in 2020, after falling to about 182,000 units in 2014.
