With the European car market still on the decline, and preparations in place to take advantage of an expected two-fold growth in China, many car manufacturers are looking around the world to identify the next growth region. For premium manufacturers at least it would appear to be Brazil, the largest economy in Latin America with annual car sales of 4.3 million units.
The vast majority of these sales are what we would term mainstream models so options for the likes of a Citroen or Fiat to enter the market is limited, but with less than 100,000 'luxury' cars sold last year the country is ripe for the likes of Audi, BMW, Mercedes-Benz and Jaguar/Land Rover. In fact, these manufacturers are betting that luxury car sales will triple by 2017 and have thus far invested close to a billion Euros on factories in Brazil.
An estimated market of 300,000 cars may seem like a lot but it hardly warrants an investment of that magnitude - a billion dollars would pay for a lot of cargo ships to transport cars from existing plants in the United States and even Europe. There is method to the madness though; under laws that will be enacted in 2017 any car imported into the country will automatically be hit with a 30 per cent tax, feasibly putting these cars out of reach for even Brazil's most affluent consumers who, according to the latest census, earn just over €2,500 per month.
However, for every car produced in Brazil one will be exempted from the tax, so the plan of most of the premium manufacturers is to build their 'lower' end cars at these new plants while importing their higher end models. Mercedes-Benz Iracemapolis plant will churn out up to 20,000 examples of the C-Class and GLA SUV (once the latter goes into production); Audi's Sao Jose dos Pinhais will offer up 30,000 A3 and Q3 models; and while BMW has not yet announced what the expected 30,000 volume of its Santa Catarina plant will be made up of it is likely to be 1 Series and X1 models.
Jaguar/Land Rover has only just begun advertising jobs for its plant in Brazil http://www.jaguarlandrovercareers.com/search-apply/?role=1587 so even less is known about its plans but the Freelander and possibly Range Rover Evoque seem like good outside bets, possibly alongside Jaguar's forthcoming 3 Series rival.