Tata Motors-owned Jaguar Land Rover (JLR) has declined to confirm or deny media reports that it plans to build a factory in Brazil.

Brazilian trade minister Fernando Pimentel said on Monday that JLR planned to build the factory, Dow Jones reported, citing the local Estado news agency.

Pimentel said JLR already had a construction project prepared but was yet to pick a location for the new factory, Estado reported, citing the minister after a meeting with UK authorities.

JLR spokesman Jonathan Griffiths told just-auto the company has “ambitious plans” for expansion but “does not comment on speculation”.

Estado said the planned new factory- which follows the start of Freelander kit assembly in India earlier this year – was a response to higher taxes on imported cars that Brazil enacted in September and which go into effect mid-December. The government raised taxes by 30 percentage points on cars with less than 65% locally produced components in order to slow the flow of imports that have flooded the country.

A new set of rules governing the automotive industry are likely to make permanent the higher tax on cars without a stipulated proportion of locally produced parts but new carmakers such as Land Rover are likely to have time to ramp up production to meet that, Estato said.

Pimentel was quoted as saying Land Rover will have such a transition period without giving detail about the new auto policy, Estado reported. The new policy is expected to go into effect when the current tax hike expires at the end of 2012.