Most of the outlay, jointly announced by President Vicente Fox and Chrysler Group´s chief operating officer, Eric Ridenour, will go to upgrading the Toluca Assembly Plant, the only place in the world that produces the Chrysler PT Cruiser automobile. Money will also go to the construction of two supplier parks and additional operational improvements.

The expansion and renovations, most of which will take place in 2006, will allow the Toluca facility the flexibility to manufacture similar models on one assembly line, officials said.

"The bottom line is that consumers are demanding more of our remarkable products," said DaimlerChrysler Mexico Vice President of Manufacturing Roberto Gutiérrez.

In 2005, the plant rolled off 158,000 PT Cruisers and PT Cruiser convertibles.

DaimlerChrysler spokesman Edward Saenz said the key market for PT cruisers is likely to continue being the United States, although the plant manufactures for the entire world.

Saenz said the investment should lead to more jobs at the plant, which currently employees 2,600 people, but he could not specify how many.

Fox said the upgrading will contribute to Mexico getting more than US$18 billion in foreign direct investment this year.

"Every product that comes out with the quality of these cars is the best promotion for investing, so our economy keeps on growing and keeps on generating jobs for the young," Fox said.

Mexico produced a total of 1.6 million cars in 2005, he said.

The investment announced Wednesday is part of a wave of upgrades by DaimlerChrysler AG´s Chrysler Group, which said in January it is planning to increase its annual production capacity by as much as 43 percent by next year.

Chrysler recently announced plans to invest US$1 billion in two plants near St. Louis, Missouri, and recently completed a US$419 million renovation of a plant in Belvidere, Illinois, that builds the Dodge Caliber, the replacement for the Dodge Neon.