Mercedes-Benz has broken ground at its new passenger cars plant in Brazil which will begin production of the C-Class in the first quarter of 2016. Production of the GLA compact SUV (launched with imports late in 2014) follows mid year.

The new plant in Iracemápolis near São Paulo will allow Mercedes to tap the potential of the Brazilian market and the automaker is aiming for capacity of 20,000 vehicles a year in the first stage.

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Manufacturing and supply chief Markus Schäfer said: “If the market develops as hoped for, the plant has the potential for a further significant expansion in the future.”

Mercedes-Benz is spending BRL500m (US$182m) on the Iracemápolis plant creating 600 jobs with some 3,000 additional posts expected in the region at suppliers and service providers.

M-B Brazil president Philipp Schiemer said: “With the new plant in Iracemápolis, we will be the only company producing the full vehicle range in Latin America – from passenger cars and vans to trucks and buses. We are positive about the potential of the Brazilian [car] market.

Mercedes-Benz is working with SENAI, the Brazilian national service for industrial training, which has more than 800 centres nationwide. It has established a new base in Iracemápolis that will start training in the first half of this year.

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Schäfer said plant automation would be significantly lower than in traditional Mercedes-Benz plants.

“Machines don’t develop, build, or sell cars – people do. That’s why our focus is on our employees. With this approach, Iracemápolis will be one of the most flexible plants in our global production network, indicating our future trend.”