German automaker Daimler will build a new production plant in Iracemápolis, Sao Paulo, Brazil, to manufacture Mercedes-Benz cars for the local market.
The company has signed a framework contract with Brazilian President Dilma Rousseff for establishing the plant. It plans to invest €170m in the plant during the first phase.
The plant will produce the company's next-generation C-Class and GLA vehicles with the first production being planned in 2016.
Mercedes-Benz production and procurement management board member Andreas Renschler said: "With the next generation of the C-Class and the GLA, we will be localizing two highly attractive products with top Mercedes quality, for which we see great potential in the Brazilian premium segment."
The plant will have an annual production capacity of 20,000 vehicles, and it is expected to create 1,000 new jobs.
Daimler's Brazilian arm, Mercedes-Benz do Brasil will acquire land for the project in the region.
Mercedes-Benz do Brasil CEO Philipp Schiemer said with the local production of cars, Mercedes-Benz stood out as the only company to act in all segments of mobility in Brazil, with cars, trucks, buses and vans.
"The proximity of our production footprint in Sao Paulo and Minas Gerais will also allow us to have a greater integration among plants and exchange possibilities for the employees," Schiemer added.
