Ford ups Brazil bet with new $281 million investment

Ford Motor Co unveiled plans on Thursday to build a small sport utility vehicle in Brazil for global markets, boosting its investment plan in the country over the next five years by 500 million reais ($281.4 million).

The program will lift Ford's investment through 2015 in Latin America's largest economy to 4.5 billion reais from the 4 billion reais it announced in November, the company said in a statement.

The investment is the largest that Ford has ever earmarked for Brazil, a continent-sized country where the U.S. automaker has been operating for 90 years.

The new EcoSport, a pint-sized SUV developed at Ford's state-of-the-art Camacari plant in the northeastern state of Bahia state, will be sold in Brazil and in export markets.

The vehicle has been a huge hit in Brazil, where it is the poster child for Ford's turnaround in a market that it once contemplated abandoning. The EcoSport is also popular in Mexico, Venezuela and Argentina.

Ford Chief Executive Alan Mulally outlined the new investments to President Luiz Inacio Lula da Silva at a meeting in Brasilia, a day after unveiling a $250 million plan to increase production in neighboring Argentina.

Ford, the No. 2 U.S. automaker, said the platform for the new EcoSport will be used in up to five other vehicle lines, accounting for 1.6 million cars a year around the world by 2014.

Brazil has been a bright spot in recent years for global automakers, which are suffering much more in core markets like the United States and Europe.

Auto sales in Brazil surged 30 percent in March from a year earlier to an all-time high as consumers flocked to showrooms before government tax breaks expired at the end of the month, according to the national dealers association, Fenabrave.

Brazil is also a major market for Italy's Fiat SpA, Germany's Volkswagen AG, and U.S.-based General Motors Co GM.UL.

VW said in November it plans to invest 6.2 billion reais in Brazil through 2014 to develop new vehicles and increase production capacity. GM has unveiled plans to spend $1 billion through 2012 and Fiat around $1 billion in 2010, looking to meet rising demand in Brazil for new cars.