SAO PAULO – General Motors will invest $780 million in two Brazilian factories in the state of Sao Paulo to increase production and broaden its vehicle lineup for the growing South American market.

The money will be used to add two models and boost output by about 30 percent at the assembly plant in Sao Caetano do Sul, GM said, without identifying the new vehicles.

The company will also upgrade the stamping facility at Mogi das Cruzes, President of General Motors do Brasil Jaime Ardila told reporters last week in Sao Paulo.

The investment, part of a $2.75 billion plan for 2008 to 2012, uses money generated by Brazilian operations.

It was the first installment since Chairman Ed Whitacre took over as chief executive officer in December.

GM has $348 million yet to be committed, the Detroit automaker said in a statement.

“GM knows that success not only in Asia but in South America is going to continue to be critical,” said Michael Robinet, vice president of global forecasting for CSM Worldwide Inc. in Northville, Mich.

Brazil is GM’s third-largest national market after the U.S. and China.

Companies are boosting spending to expand capacity in the country as light-vehicles sales rose to a record 3.01 million units last year, according to the country’s dealership federation, known as Fenabrave.

In November, Volkswagen, Europe’s largest automaker, said it planned to invest $3.4 billion in Brazil from 2010 to 2014, and Ford said it would spend $2.2 billion over five years.

“The Brazilian market is booming,” Nelson Silveira, a GM Brazil spokesman. “We have had three all-time consecutive years of record sales. We expect the industry to increase at least 5 percent this year.”

GM is making money in Brazil, Chief Financial Officer Chris Liddell said earlier this month.

The largest U.S. automaker ranked third in vehicle sales in the South American country in February, with 21 percent of the market, trailing Fiat, 23 percent, and Volkswagen, with 22 percent, said Fenabrave.

GM is increasing capacity at the Sao Caetano do Sul plant to 270,000 by the end of 2011, Silveira said.

“Production at Sao Caetano is near its limit,” said Ardila, who is also president over the Mercosur region, which includes Argentina, Uruguay and Paraguay.

The Sao Caetano plant makes several Chevrolet models, including the Corsa hatchback and Vectra sedan. GM will begin selling five new models in Brazil in 2011 and six in 2012, Ardila said.