SÃO PAULO, Brazil — It was an announcement that thrilled well-to-do Brazilians.
BMW, creator of German luxury cars, said this year that it would consider opening its first South American factory in their country.
The announcement was yet another sign of confidence in Brazil, an up-and-coming emerging market that has seen rapid growth. Brazil has become a top investment destination as businesses seek burgeoning markets amid the crises in the US and European nations. In turn, Brazil has worked to lure investors with the promise of a business-friendly environment and the opportunity for robust growth.
Brazil has been growing at a rapid pace, but has slowed in the past year and growth projections are more tempered for next year. The government has been working to keep growing and is preparing to host the World Cup in 2014, and the Olympics two years later.
But continued growth will require more foreign investment.
The luxury-car market has been closed to all but the wealthiest Brazilians, since imported cars are more costly. With BMW turning out cars on Brazilian assembly lines, sales would likely rise among status-conscious Brazilians.
So BMW wanted to set up shop in South America’s largest country, with its booming business centre and potential for big sales.
And then Brazil hit back.
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Originally published on December 2, 2011, on GlobalPost.