General Motors chairman Rick Wagoner reportedly said he expects to see increased vehicle demand in Brazil this year.

“We expect the Brazilian market to improve this year and for sales to grow,” the chief executive officer told Reuters as he formally announced investment of $US240 million to expand a plant in southern Brazil, where GM will produce a new model.

The report said the investment aims to increase annual production at the Gravatai plant, in the state of Rio Grande do Sul, to 210,000 cars from the current 120,000 by 2006, when the new model should be launched.

About 80% of the new model cars built by the plant will be destined for the Brazilian market, Wagoner told Reuters, adding: “GM’s policy is to sell where we produce.”

The news agency noted that GM sold 333,420 vehicles in Brazil during 2003, 1.5% fewer than the previous year and second only to Fiat.