GM Investing $1 Billion in Brazil for New Cars

General Motors says it is investing $1 billion to develop two new car models in Brazil.

The president of GM's operations in Brazil and the Mercosur countries says it is GM's biggest investment since the onset of the global financial crisis.

Jaime Ardila says about 50 percent of the money will come directly from GM Brazil while the rest will be borrowed.

One new small car and one medium-sized car will be developed at the Gravatai plant in southern Brazil and are expected to be in production by 2012.

Ardila says Wednesday GM Brazil has avoided the problems of its parent unit in the U.S. because of strong demand in Latin America's largest economy. GM sold 580,000 vehicles in Brazil in 2008 -- its most ever.

A whirlwind 40-day bankruptcy for GM concluded last week with the closing of a deal to sell key operations and core brands, including Chevrolet and Cadillac, to a new company that will be majority owned by the U.S. Treasury.