DaimlerChrysler and its suppliers will invest US$1bn in the Mexican Toluca Assembly plant, to update and retool the facility and create two new industrial parks for suppliers.

The investment will allow DaimlerChrysler to develop modular assembly processes, and add flexibility to manufacture derivative models on one assembly line. Flexibile working measures in place in Mexico were critical to the decision to invest there, said Chrysler Group chief operating officer Eric Ridenour.

The improvements at Toluca will include an all-new body shop. New robotics will have the capability to make necessary tool changes automatically within cycle time.

The newly built and jointly funded supplier parks will enhance plant operations and focus on increasing modular assembly systems. The supplier parks will provide head liners, cockpits, front-end modules and front and rear suspensions. Their location near the Toluca facility will provide just-in-time production for the plant.

A large part of the investment will be made during 2006.

The Toluca plant celebrated the production of the one millionth Chrysler PT Cruiser on March 8th.

Earlier, DaimlerChrysler announced that it would consolidate its Latin American and Caribbean passenger car sales and marketing activities for Chrysler and Mercedes-Benz in Mexico.