Production of Chrysler vehicles in Brazil is under consideration, Fiat Group CEO Sergio Marchionne said during a visit to the country to open an expanded Case New Holland agricultural equipment plant.

Marchionne said “the Jeep line-up would the most suitable”, without providing more details.

“We need to strengthen our presence in Latin America and for the next five years we will keep investing”, he added.

Fiat is due to announce its new strategic plan on 21 April and, if it confirms plans to manufacture the American designed Jeeps in this region, it will probably have to build another plant.

Both existing factories - in Betim (Minas Gerais state) and Cordoba (Argentina) - would require enlarging, especially Betim which is already operating above nominal capacity.

The Brazilian subsidiary urgently needs a medium-size pickup truck to sell in the Mercosur region. It has ruled out any deal with Tata, whose current pickup designs are outdated for this market’s needs, but there are no pickups at all in the current Jeep range.

Any Fiat newcomer would have to compete with the new Argentine-built Volkswagen Amarok and other US or Japanese designed models built in the Mercosur region. Fiat has previously built its own pickups in Brazil but only small models such as a long-running Uno-based model.

Earlier speculation suggested the Dodge Dakota, manufactured in Brazil by Chrysler between 1998 and 2002, could be revived but the local unit has denied any intention to resume production.

The expanded Case New Holland plant Marcionne flew in to open is in Sorocaba - 56miles from São Paulo and the same town in which Toyota is building its new compact car plant.

Closed until two years ago, the CNH unit reopened in 2008 and was recently enlarged from 107,640 to 167,438sq yd with a a $500m investment, creating 6,000 direct and indirect jobs.

Sugar cane harvesters are among the main products. The cane is a key source of Brazil's ethanol-based automotive fuel.