General Motors is to spend $US500m on operations in Argentina and Brazil to develop new generation small vehicles for local and other emerging markets.

The automaker will also expand its Brazilian product development centre.

The plan to develop a new family of small vehicles built in Argentina and Brazil will include upgrades to plants in Rosario, Argentina and Sao Caetano do Sul, Brazil and product development work in Sao Caetano do Sul.

Expansion of Brazilian product development will include a new engineering building in Sao Caetano do Sul and new equipment and infrastructure to support the unit's growing in the automaker's global product development.

"With the improved economic environment in Argentina and Brazil, we are proceeding with our next phase of investments to support our continued growth in Latin America and around the world," GM chairman and CEO Rick Wagoner said.

GM Brazil is focused on growing emerging markets.

"We have been growing our engineering resources in key emerging markets like Brazil, China and India - not only for development of vehicles for their own markets, but for other emerging markets as well," Wagoner said.

"This investment will enable us to take full advantage of the expertise we have in Brazil and support our planned local and global sales growth."

GM sales have been strong in Latin America of late. In the first half of 2007 its sales in Brazil and Argentina were up 18 and 16% respectively year on year while its units in both Argentina (75,000) and Brazil (410,000) set sales records last year.