“This will create the necessary conditions for us to maintain the balance of sales between Europe, Asia and the Americas,” claimed Ian Robertson.
The BMW Group plans to build a new auto plant in Brazil, based on the government’s new industrial policy under the so-called “Inovar Auto” legislation just adapted.
The hard-nosed legislation strictly limits the amount of money that can be counted toward local content, imposes national tariffs of as much as 55% of an imported vehicle’s sales price and requires specific R&D and production investments as a percentage of sales with large tax credits that increase from now until 2017.
It is the latest example of protecting a local auto industry against pillaging by global companies in the view of supporters. Critics counter that consumers will pay higher prices. There are also other taxes in Brazil for imports – a 30% import tax, and a State commercial tax of 18%.
Subject to the almost certain final approval of the plans by the Brazilian Government, the BMW goal is for production to begin in 2014. Investments over the next few years will total more than €200 million for a production capacity of approximately 30,000 vehicles per year. More than 1,000 new jobs will be created at the new plant – as well as additional jobs within the supplier network because of the new plant, BMW said. Negotiations with the State Government of Santa Catarina are already well underway for the new facility in the Joinville region.
“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, said Ian Robertson, Member of the BMW Board of Management in Brasilia. “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 has 29 production and assembly facilities in 14 countries. The company has been manufacturing BMW motorcycles at its Manaus location in Brazil since 2010. BMW sold 15,214 vehicles were in Brazil during 2011. BMW Motorrad sold 5,442 motorcycles.
