Reuters quoted Mr Fernando Pimentel trade and industry minister of Brazil as saying that PSA Peugeot Citroen will invest BRL 3.7 billion in Brazil to double its production by 2015.

The announcement followed a report that Volkswagen AG is also negotiating with authorities to build a USD 2 billion factory in Brazil, the latest foreign automaker looking to raise local output after a tax increase on imported cars.

Brazil said in September 2011 that it would raise a tax on autos with less than 65% local content in a move to support local manufacturing jobs amid a slowdown in Latin America's largest economy.

Several automakers have since confirmed plans for new production in the country, including Nissan Motor Co Ltd and Renault SA and China's JAC Motors.

Peugeot's top executive in Latin America, Mr Carlos Gomes, told reporters in Brasilia the company aimed to increase its capacity to 300,000 vehicles.

Mr Gomes also said Peugeot would launch eight new models in Brazil and expand its network of dealerships.

(Sourced from www.reuters.com)