Honda will invest US$100 million to expand its production facilities in Brazil to tap growing demand for vehicles in South America amid a regional economic recovery.

Output capacity at Honda’s plant in Sumare, Sao Paulo state, will be expanded from the current level of 56,000 units a year to more than 80,000 units by the beginning of 2007, and to 100,000 units in 2008, the Tokyo-based automaker said in a statement cited by The Associated Press (AP).

Overall vehicle sales in Brazil grew 9% last year, while Honda’s sales outpaced the market by jumping 58%, the company reportedly said. Demand has been especially strong for the company’s Civic and Fit [Jazz] models, Honda said, according to the report.

The Associated Press said Honda increased production in Brazil this year by operating the plant on three shifts, which helped lift year-to-date sales 14% from last year to 46,641 units. The new investment will add welding, painting and assembly lines to the existing plant.