SWEDEN: Volvo issues statement on Brazilian car plant

According to khabarkhodro، the president of Volvo Cars' Brazilian operations has spoken of plans for a production plant in the country. Volvo Cars has, however, told just-auto that no decision has been taken.

"With reference to media reports regarding the establishment of a Volvo plant in Brazil, Volvo Car Corporation wants to point out that no such decision has been made or is imminent," corporate spokesman Per-Åke Fröberg of VCC's Public Affairs department stated via email.

"When it comes to new manufacturing establishments our full focus is on China. This does not exclude studies in other markets, but we refrain from commenting upon this in further detail," he added.

Dow Jones' report names Joel Leite as its source. The journalist and blogger reportedly published the news of a production plant after interviewing Paulo Solti, the president of Volvo Car da America Latina. The newswire further claims that Volvo's Brazil press office confirmed the president's remarks.

The traditionally volatile Brazilian market is none the less growing in importance for the world's automotive manufacturers. Traditionally high tariffs have persuaded multiple manufacturers to set up new manufacturing plants, that list including Fiat, Ford, Toyota, and Hyundai in recent times.

Dow Jones' report says VCC's final decision to go ahead with a manufacturing or assembly plant depends on Brazil's approval of the final details of auto-industry rules due to become effective in 2013. Last year, the government in Brasilia listed taxes on cars by 30% but granted exemptions to cars with a specific amount of locally produced content. From next year, any car company with a local assembly plant and R& operations and which also buys Brazilian-made components will also be exempted from the higher tax.

In 2011, Volvo Cars saw its sales surge by 140% to 5,200 vehicles. This was thanks mostly to the success of the S60 sedan.