Audi Mulls Resuming Production in Brazil

Volkswagen AG's Audi unit says it will decide next year whether to return to manufacturing vehicles in Brazil possibly by adapting an existing VW facility, Reuters reports.

Leandro Radomile, head of Audi's Brazil unit, tells the news service the project is in its initial phase. Audi built its A3 small hatchback at a VW plant in Curitiba, Brazil, from 2000 to 2006.

The increasing numbers of wealthy Brazilians is attracting luxury-vehicle makers to the country. BMW AG unveiled plans in October to open a €200 million car factory in the country by late 2014. In the same month, Honda Motor Co. said it would begin selling its Acura brand in Brazil in 2015.

Audi complains that the 30% tariff on imported autos that Sao Paulo imposed in September has caused it to fall short of its goal of selling 5,700 vehicles in Brazil this year. The brand's volume has fallen 15% year over year to 3,500 units in the January-November period, according to local carmaker group ANFAVEA.

In 2016 Audi plans to open an assembly plant in Mexico, which has a free-trade pact with Brazil. But a trade dispute between the two countries prompted Mexico to agree earlier this year to restrict its auto exports to Brazil by 30% for at least three years.