Sony has decided to stop manufacturing smartphones in Brazil due to lack of fiscal incentives and the current financial crisis.
The end of tax exemptions for local production of smartphones and computers costing up to R$1,500 ($530) has prompted the firm to only sell imported devices in the country.
The company's marketing director Ana Peretti told news portal G1 that the decision was also based on the current macroeconomic scenario in Brazil and that this is an attempt to make distribution more flexible.
Sony devices such as the Xperia X and Xperia XA, launched in Brazil earlier this month, are part of the new strategy and are assembled in China and Thailand.
Prior to this change of plans, Sony smartphones were produced in Brazil by Foxconn and Arima in manufacturing plants based in the countryside of São Paulo.
The decision is a big shift from Sony's announcement of a multimillion dollar plan to expand in the Brazilian market just over a year ago.
At the time, the company was confident about continued consumer demand for smartphones and predicted a sales increase even with challenging market conditions.
Another mobile manufacturer that decided to downsize operations in Brazil recently is Xiaomi - the Chinese company ended its local manufacturing deal with Foxconn just a year after launching operations in the country.