Mercedes-Benz is adding production of the C-Class in a new plant in Iracemapolis, near Sao Paulo, Brazil, and announced that it has broken ground on the new plant. Production is scheduled to start in the first quarter of 2016 with the C-Class sedan, though it will be followed by 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,” Markus Schafer, member of the divisional board of Mercedes-Benz Cars, Manufacturing and Supply Chain Management said, in a company statement. The plant is expected to open up 600 jobs, but also to have significantly less automation than other facilities.
Significance: Mercedes-Benz is returning to passenger car production, having built the A-Class in Brazil from 1999 to 2010 at its Juiz de Fora plant – that plant now builds commercial vehicles. IHS Automotive forecasts volume from the plant in the range of about 11,000 units per annum through this decade, split roughly evenly between the two products. The ground-breaking ceremony on 5 February followed a start of construction in August 2014. Audi and BMW are among the luxury makers adding production in the country as well; Brazil’s Innovar Auto taxation program makes in-country production advantageous, even at low volumes. Mercedes announced its plant in 2013. Despite the decline expected in sales for 2015, Brazil is expected to return to growth in 2016 and remains the fourth-largest single market.
