Fiat to invest $2.8bn in Brazil to expand output

BRASILIA (Reuters) -- Italian automaker Fiat will invest 5 billion reais ($2.8 billion) to expand its assembly plant in Brazil's fast-growing market, a senior government official said today.

The investment will be made through 2010 to expand the company's Betim factory, outside Belo Horizonte in southeastern Minas Gerais state, its governor, Aecio Neves, told journalists.

"The new plant will be Fiat's largest," Neves told journalists in the capital Brasilia after a meeting with Fiat CEO Sergio Marchionne.

Marchionne was to meet President Luiz Inacio Lula da Silva later on Friday.

Brazil should see record sales of 2.4 million to 2.45 million cars this year, up 25 percent from last year, according to national automakers association Anfavea. Production is expected to jump 13 percent to 2.96 million cars this year.