Fiat has revised its plans for building a new car manufacturing plant in the north east, a poor region of the country. The chosen state remains Pernambuco, but now in the city of Goiana instead of Ipojuca. Investment will total R$7.2bn (US$4.4bn) and it is claimed 12,000 jobs will be created, both direct and indirect.

Capacity will be 300,000 units a year for a new car due out in 2014 to replace the ancient Uno Mille in production here since 1984. The Italian automaker has also just announced it will also make 300,000 engines and 400,000 gearboxes  on the same site.

There is news from Fiat-owned Chrysler, too. According to Luiz Tambor, sales and marketing manager for the US brand in Brazil, the automaker wants to produce a compact midsize SUV like the Honda CR-V, Hyundai ix35, and Chevrolet Captiva.

The new model would be a good fit in Latin America market, especially if styled to lure local buyers – Brazil is a good place to sell 'faux' off roaders with all the dress-up gear and a higher ride height – but only two wheel drive.

“A decision is due to be made next year for launch in 2014. Architecture will be shared and developed together with Fiat. We don’t know yet if production will be at a Chrysler manufacturing plant or at the new Fiat one in Goiana. Brazil, Mexico and Argentina are also in the running to make the new model,” Tambor said.

However, it is very unlikely, just-auto has learned, that the vehicle will not be made in Brazil if given the green light.