The only solution for any manufacturer to dampen a sales slump in its home market or region is to expand its operations on a global level. Ford, GM, Fiat and other mainstream carmakers have been doing it for years, and now, even higher-end companies like the BMW Group are joining in.
On Thursday, the BMW Group confirmed plans to erect a new assembly plant in Latin America’s largest economy, Brazil, where the German brand has seen its annual sales increase by an average of 74 percent since 2009, to 15,200 deliveries last year.
Even though that number is less than what BMW sells in a month in the U.S. (21,761 cars in September of 2012), the Bavarian brand argues that Brazil’s rising living standards will fuel demand for luxury cars in the years to come as the country get ready to host the 2014 World Football Cup and the 2016 Olympic Games.
While BMW has made the decision to build a plant in Brazil, there are still many details to be resolved.
“We are on track and will now submit an investment plan with the Brazilian government,” the company’s finance chief Friedrich Eichiner told Reuters on Thursday.
The report from Reuters said that as a first step, BMW will likely start with a “pure assembly” operation where it will make cars from “completely-knocked-down” kits and will then move on to a regular production line.
Currently, BMW’s smallest full-scale manufacturing facility is in Rosslyn, South Africa, which produced more than 53,000 cars in 2011.
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