Mitsubishi Motors is to invest nearly 800m reais (US$448m) up to 2015 to build the Pajero Dakar jeep and Lancer Sedan.
According to Brazilian press reports, Mitsubishi distributor MMC Automores do Brasil will produce the models under a licence agreement and double capacity to 100,000 vehicles.
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The reports also indicate the deal will see MMC have the option to make electric cars.
Some 1,000 new workers are thought to be recruited as part of the agreement, taking employee numbers to around 4,000.
