News: German carmaker Daimler plans to build a new factory to manufacture Mercedes-Benz vehicles in Brazil, reports Stuttgarter Zeitung, citing Daimler CEO Dieter Zetsche. Daimler will finalise between two or three locations that it has shortlisted for the factory in 2013. The move is aimed at tapping the growing demand for compact cars in the country. However, Daimler has not yet specified the model it intends to manufacture.
BMI View: BMI maintains a moderately bullish view on vehicle manufacturing in Brazil, predicated chiefly on the government's tax policies. Under the Inovar Auto programme, import tariffs are designed to stimulate the autos sector by attracting foreign investment, and increasing the level of domestic innovation. Indeed, a number of international auto manufacturers have invested in the country as this policy continues to bear fruit, and we expect this to continue as manufacturers target this high-growth market