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Jaguar Land Rover plans $437 million Brazil factory: government

Showroom attendants polish a Land Rover vehicle at a Jaguar Land Rover showroom in Mumbai February 13, 2013. REUTERS/Vivek Prakash
Showroom attendants polish a Land Rover vehicle at a Jaguar Land Rover showroom in Mumbai February 13, 2013. REUTERS/Vivek Prakash

By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) - British luxury car builder Jaguar Land Rover is about to invest about 1 billion reais ($436.9 million) on a new manufacturing plant in Brazil's Rio de Janeiro state, three government sources told Reuters on Monday.

Production at the factory, to be built in the city of Itatiaia, could begin as early as 2015, and an official announcement is scheduled for December 3, said one of the sources, who is not authorized to speak on the record.

"Everything is very advanced with only minor details to be worked out," said Luiz Carlos Ferreira Bastos, Itatiaia's mayor.

The factory could employ 500 to 700 people, he added.

The two other government sources, both with Rio de Janeiro's state government, confirmed that Land Rover plans to build in Itatiaia, although they declined to be named because they are not authorized to speak to the media.

Earlier this month, Jaguar Land Rover, owned by India's Tata Motors Ltd , said it plans to expand manufacturing and increase production in markets outside Britain, particularly in China and Brazil.

The decision comes after rivals BMW AG , Daimler AG-owned Mercedes-Benz and Volkswagen AG unit Audi all decided to build plants in Brazil, spurred by government moves to raise taxes on imported vehicles, while offering tax breaks for carmakers that increase domestic investments.

"Jaguar Land Rover confirms that it is carrying out a study on the installation of a manufacturing unit in the country," a representative of the company told Reuters in an emailed statement on Monday. "At this time, we cannot confirm the size of the investment or other details of the study."

Negotiations started at the beginning of this year, one of the sources said, with Rio de Janeiro's state government offering tax breaks and fiscal incentives to help attract the company, known for its sporty SUVs.

From January through October, Land Rover sold 8,920 automobiles in Brazil, trailing BMW and Mercedes-Benz, which sold 11,520 and 10,510 cars, respectively, according to local auto dealers association Fenabrave.

($1 = 2.289 Brazilian reais)

(Additional reporting by Alberto Alerigi; Writing by Asher Levine. Editing by Andre Grenon)

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