General Motors' Mexican operation expects to make 500,000 vehicles this year compared with 447,802 in 2001, Reuters reported.

GM Mexico spokesman Carlos Gelista told Reuters the company saw output rising 5 to 7% next year on higher US demand.

"We are producing (this year) half a million units both for the local market and for export," Gelista added, according to Reuters.

Reuters said Mexico is the 10th biggest car producer in the world and has attracted investment from major car makers due to its numerous free trade treaties and low cost workforce.

Despite a recession, which Mexico entered last year and from which it is only just emerging, carmakers like General Motors have been among the few companies to have increased production, Reuters noted.

From January to October this year, GM Mexico produced 428,887 vehicles, a rise of 15.3 percent compared with the same period in 2001, Reuters added.

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