Chrysler plans to phase out production of Dodge Dakota trucks at its plant in Campo Largo, Parana state, by April 2001 and build another model instead.

The company is currently operating the plant at only 11.5 percent of capacity with daily production of 28 vehicles.

DaimlerChrysler of Brazil communications director Andre Senador said that the company doesn’t intend to close the plant. “We need to decide on another vehicle that will enable the plant to work at its planned production capacity,” he said.

The plant was inaugurated in 1998 after an investment of $US315 million with a production target of 12,000 vehicles per year. In 2000 it produced just 5,000. Brazilian correspondent Rogerio Louro Alves says that local automotive industry journalists believe that DaimlerChrysler will in fact close the plant as it did another in Argentina recently.

However, closing the Brazilian plant would make the company liable to return financial incentives received from Parana state to build it.