Volkswagen is reportedly about to announce major investments in Brazil.
It will spend around 400 million euros to build its newest Golf model there and to restart local production of Audi cars.
The investment is part of the German car maker’s overseas expansion to catch up with luxury-market leader BMW and follows the Brazilian government raising duties on imported vehicles while offering tax breaks for car makers that increase domestic investments.
Audi expects to start production in Brazil in 2015. It is due to produce 26,000 of the compact A3 annually within three years. The plant will also make the Q3 compact SUV.
BMW is spending 200 million euros on a factory in Brazil to open late next year.
However both Honda and General Motors have said luxury car sales in Brazil are not sufficient to consider making it a base for producing their upmarket models.