New Chrysler Factory Will be Built in Southern Brazil

10/25/96

The Associated Press has reported that Chrysler International announced on Wednesday that it will invest $315 million to build a pickup truck plant in the southern Brazilian state of Parana. Chrysler President Robert Lutz, who is in Brazil for this week's Sao Paulo Auto Show, made the announcement. He said the exact location of the new plant within the state has yet to be decided.

Lutz said Chrysler chose to construct the plant in Parana because of the State's excellent communications and transportation infrastructure, as well as its proximity to the suppliers and markets of Mercosur--the trading block formed by Brazil, Argentina, Uruguay and Paraguay. Chrysler's plans to build a plant in Brazil were originally announced on August 20 by Jonathan Holcomb, Chrysler's vice president for Latin America, the Mideast, and Africa. At that time, however, the company did not know where in Brazil it would build the plant.

In August, Evelyn Mariperisena, head of Chrysler's public relations in Latin America attributed the company's decision to build in Brazil to the Brazilian government's imposition of a 70-percent import duty last year. Brazil's policy allows Brazilian subsidiaries of foreign-owned automakers to import cars under a 35-percent tariff, while companies with no local operations must pay the 70 percent tariff.

Chrysler was this year's second international automaker to announce plans for building a plant in Parana: Renault announced plans to build a $1 billion factory there in March. Renault's plant will produce the company's compact Megane. Production at the is slated to start in 1999, and that factory will have an annual production capacity of 120,000 units.

Paul Dever -- The Auto Channel