General Motors Co and its suppliers will invest a total of $500-million in Argentina operations through 2019 to prepare to produce a new Chevrolet model in 2020, the company said in a statement on Thursday.
The company will invest $300-million while its supplier network will invest $200-million at the Alvear plant in Argentina's Santa Fe province. The company invested $740-million in the plant between 2014 and 2016.
The investment announcement comes as automobile production in Latin America's No. 3 economy begins to rebound, following a sharp decline amid recessions last year in Argentina and neighbouring Brazil, a major export destination.
Attracting investment from major multinationals like GM is a priority of market-friendly President Mauricio Macri. But investments have been slow to arrive since he took office in December 2015, in part due to a tax code and labour regulations that businesses say are in need of reform.
In March, the government reached a deal with labour unions aimed at increasing car production to one-million a year by 2023, part of the government's strategy of negotiating more competitive labour arrangements sector-by-sector rather than through wholesale reform like Brazil.
The investment will include an increase in GM's operations at the port of Rosario, with the aim of doubling the volume of containers it moves in and out of the country each year, the company said.