Daimler would be building a new Mercedes car plant in Brazil. This was revealed by Daimler Chief Executive Officer Dieter Zetsche in an interview with German daily Stuttgarter Zeitung. He said the move would enable the German car manufacturer to take advantage of the growing market demand for compact vehicles there.

Zetsche also revealed that they would be finalizing the location for the plant this year. Daimler would be choosing from two or three shortlisted areas for the project.

Zetsche told the newspaper, "With the new compact class we have cars on offer that are attractive and can be produced at low costs, making them a good fit for this market. It was simply a question of either producing in Brazil or not to be present there at all in this segment. Our decision is: We want to take part."

According to Reuters, Brazil was the new destination for luxury car manufacturers. Car manufacturers shifted their focus to Brazil, hoping that they would benefit from the burgeoning demand. However, the Brazilian government imposed a tax hike on foreign cars in 2012 to protect local jobs.