US based auto maker General Motors Co. (GM), is planning to invest an additional US$1.2 billion in the expansion of its operations in Brazil. General Motors is the world’s fourth biggest car maker and its plans for 2011investment are meant for the expansion and updates of its Brazilian operations.

Jaime Ardila, President of GM South America, said the investments are completely funded by the Brazilian unit and part of a biggest investment plan of around $2.9 billion. GM is currently the third biggest car maker in Brazil, producing 650,000 cars and it has plans to renew its entire product line of 20 cars, introducing four new models in 2011 and six the following year.

GM will invest the 2 billion Brazilian reais ($1.2 billion) in its Brazilian operations in 2011, double the 1 billion Brazilian reais invested this year, said Ardila.

The investments, fully financed by the Brazilian unit, are part of the company's plan to invest a bit more than 5 billion Brazilian reais in the 2008-2012 period. GM will invest about 1 billion Brazilian reais in 2012 in Brazilian operations to round out the amount.

The investments will go toward expanding and updating GM operations, which currently sell about 650,000 cars in Brazil, the world's fourth-biggest car market. As a result of the investments, the company plans to begin selling four new models in 2011 and six the following year, part of a long-term plan to renew its entire product line of about 20 vehicles currently being sold in Brazil.

GM, the third-biggest car maker in Brazil, completed one of the largest share offerings in U.S. history on Wednesday, raising $20.1 billion. Speaking at a press conference, regional GM executives said that has little impact on the day-to-day operations in Brazil.

The Brazilian operations are funded locally, so they don't rely on any proceeds from the U.S., said Denise Johnson, president of GM's Brazil unit. Also, any remittances of funds to the U.S. are analyzed in light of the needs of the Brazilian operations and that won't change as a result of the IPO, she said.

There are no plans to sell shares of the Brazilian unit, which this year will account for about 8% of total revenue for the auto maker, Ardila said. Brazil's portion of GM revenue is an increase from 3% in 2005, due both to a decline of developed markets as well as a surge in the Brazilian economy.

2 Dec 2010.