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BMW is Brazil Bound with Plans to Build a New Factory

The German car manufacturer dominates the luxury end of Brazil's car market, which is the fourth largest in the world.

German automaker BMW (IW 1000/36) plans to build a factory in southern Brazil, a more than 200 million euro ($261 million) investment expected to create 1,000 jobs, the company said Monday.

The luxury car giant hopes to start building the plant in April of next year and producing cars in late 2014, BMW vice president and sales director Ian Robertson said after presenting the project to President Dilma Rousseff.

Once paper work and administrative details are settled in the coming weeks, the agreement to set up the plant will be signed with the government of Santa Catarina state, where the factory will be located.

Robertson said plans are for capacity of 30,000 vehicles a year, although production will depend on demand.

BMW dominates the luxury market in Brazil, where it sells 10,000 to 12,000 vehicles a year.

The Santa Catarina state government will have a stake in the project, its governor, Raimundo Colombo, said.

Brazil's car market is the fourth largest in the world, surpassed only by those of China, the United States and Japan. But Brazil is only the world's seventh largest manufacturer, producing 3.4 million units a year.

For this reason the government is pushing an ambitious incentive plan that penalizes imports and favors domestic production.

The government says it expects to receive $22 billion in investment in the auto sector over the next three years.

Copyright Agence France-Presse, 2012

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