BMW will choose Sao Paolo, Brazil's biggest city, as the site for its first car assembly plant in Latin America, German business daily Handelsblatt reported.

Citing company sources, the newspaper said the supervisory board was set to approve in December plans to assemble cars in Sao Paulo "because all the important parts suppliers are there".

A BMW spokesman denied to Reuters it had already made its choice, saying only: "There is still no decision."

BMW said in March it would likely this year approve plans to expand its production footprint to Latin America where Brazil is already an important market for volume carmakers like Fiat, General Motors and Volkswagen. Mercedes also has a plant in the country.

For BMW, it remains a fledgling market with expected sales of 10,000 vehicles this year, almost negligible for a company forecasting volumes of over 1.6million globally, Reuters noted. The company is keen to expand quickly in emerging markets.

At BMW's annual general meeting in May, chief executive Norbert Reithofer told shareholders Brazil, Russia, India, Korea and Turkey - or BRIKT - was a group with dynamic growth and BMW was considering setting up another site in BRIKT in addition to the assembly plant in Brazil.

BMW already operates assembly plants in China -  a joint venture with Brilliance Auto - and India.