Chrysler is to spend $US570m on a new engine plant in Saltillo, Mexico.


Scheduled to begin production in 2009, the plant will produce the new Phonenix family of fuel-efficient V6 engines.


Plant construction begins in June 2008.


The Saltillo plant is part of Chrysler’s $3bn so-called ‘powertrain offensive’ announced in February for the production of more fuel-efficient engines, axles and transmissions.


The Mexico plant is the second Phoenix engine plant recently announced by the automaker. The other will be in Trenton, Michigan, next to the current engine site.


“The Chrysler Group has a deep commitment to our Mexican operations with more than 60 years of history here, and we will continue that commitment going forward,” a spokesman said.


The new plant will have an annual manufacturing capacity of 440,000 engines and will be situated in Derramadero, near Chrysler’s Saltillo truck assembly plant which builds the Dodge Ram.


Once the fully operational the plant will have 485 full-time employees.