SAO PAULO – DaimlerChrysler AG announces it will produce the Mercedes-Benz C-Class Sports Coupe at its factory in Juiz de For a, Minas Gerais, Brazil.

The plant has been in danger of closing since Mercedes Car Group halted production of its A-Class cars there in August 2005.

The facility employs 1,100 workers, who perform complete-knocked-down kit assembly of the current C-Class model. However, management does not eliminate the possibility of new hires when production of the new coupe begins in first-quarter 2007.

The C-Class Sports Coupe will supply the domestic and European markets. Union leaders representing Juiz de Fora workers expect output to total 35,000 units annually, half the plant’s capacity.

Since it was launched five years ago, the Sports Coupe has sold 270,000 units globally. Only 70-80 models were sold in Brazil, at prices ranging from $99,000 to $110,000.

Prices in Europe range from €25,000 to €35,000 ($31,400-$44,000).

The Brazilian-built C-Class currently is only for export and mainly for European markets.

“Now we can foresee a better future for the factory in Juiz de Fora," says Henrique Almeida, head of the union that represents the plant’s workers.

The facility opened in 1999 at a cost of $820 million, with plans to manufacture 70,000 C- and A-Class compact cars annually. Instead, it has produced only 60,000 units over six years.

Mercedes management had planned to build the Smart ForMore cross/utility vehicle in Brazil, but the project was canceled last year. The auto maker decided to do CKD C-Class assembly, instead, to keep the plant open.

“Based on this (coupe production) decision, we are using the current expertise and capacity of the production unit in Brazil,” says Rainer Schmuckle, in charge of worldwide production for Mercedes.