Chinese auto-maker Chery Automobile Co. will spend 700 million US dollars on a plant in Sao Paulo, Brazil's wealthiest state, the local newspaper o Estado de S. Paulo reported in its Thursday edition.
The report, which cited an unnamed person close to the company, said the facility will be based in Jacarei city and will have an annual production capacity of up to 170,000 units. The plant is expected to start production in 2013.
Chery's executives signed a memorandum of understanding with local authorities at the end of this month, the report said. The investment planned by Chery came as Brazil's auto industry expands.
Brazil industry sold a record 3.14 million vehicles last year, up 11% on the year, reflecting the country's fast recovery from the global slowdown. Brazilian Motor Vehicle Manufacturers Association, or Anfavea, expects an increase of 8% in sales in 2010.
Auto makers are scheduled to invest 11.2 billion USD between 2010 and the end of 2012 on new models, new technologies and expansion, according to Anfavea. For the 2007/09 period car makers invested 8.1 billion.
The main auto companies in Brazil are Fiat, Volkswagen AG, General Motors Co., Ford Motor Co. Toyota and Honda.