Swedish car maker Volvo Car is planning to build a $247m car plant in Brazil and build about 15,000-20,000 cars annually in the country.
The final decision depends on Brazil's approval of the final details about auto-industry rules that go into effect starting next year.
Volvo Car Latina America president Paulo Solti said, "The factory would take 24 months to build and would start production in 2015."
According to the company the location for the new plant has not been decided yet but is likely to build a factory in Sao Paulo or Parana.
Brazil's government has increased taxes on cars by 30% last year, with exemptions granted to cars with a specific amount of locally produced content in order to protect its auto industry from a flood of imports.
From 2013, auto makers that build locally, invest in local research and development, and buy Brazil-made parts will also be exempted from the higher tax.
Volvo Car has been recently acquired by China's Zhejiang Geely Holding Group from Ford.