BMW invests in Brazil

BMW Group has announced plans to build another manufacturing plant in Brazil, with annual production of around 30,000 vehicles slated to commence from 2014.

Pending approval from the state government of Santa Catarina, the proposed factory in the country’s Joinville region will cost more than 200 million Euros ($A252 million) and will directly employ around 1000 people.

Plans to build the plant were submitted Monday at a meeting between BMW executives and Brazilian president Dilma Rousseff in the capital, Brasilia. The announcement coincides with the bustling Sao Paolo motor show, which started earlier this week.

The projected new plant in Brazil will extend the BMW Group’s production network, which currently comprises 29 production and assembly facilities in 14 countries.

BMW has been producing motorcycles in Brazil since 2010, at its Manaus plant.

Sales of BMW cars in Brazil topped 15,000 units in 2011, representing growth of almost 54 per cent over the previous year.

The German car-maker is just one of a large number of global brands turning their focus to Brazil – one of the world’s fastest growing car markets – as sales in Europe decline and growth in China slows.

For example, the Volkswagen Group plans to invest 3.4 billion Euros ($A4.25 billion) in its model line-up and factories in Brazil through 2016, while Nissan will open a new plant in Rio de Janiero in 2014 that will produce 200,000 cars annually.

Hyundai’s new $600 million Piracicaba plant in the state of Sao Paolo is gearing up for production, while Renault has announced plans to expand its existing production at Curitiba from 280,000 units annually to more than 380,000 units from early 2013.

Member of the BMW AG board of management responsible for sales and marketing Ian Robertson said the proposal was aimed at strengthening the company’s long-term commitment to the country – South America’s most populous – which he described as a market with “tremendous potential”.

“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,” he said.

“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.”