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General Motors is to invest $445 million to build a new engine plant and upgrade an existing vehicle assembly plant in Thailand, chairman and CEO Rick Wagoner announced today.

GM is to build its first diesel engine plant in south-east Asia to supply four-cylinder engines for Chevrolet vehicles made locally, as well as supplying other plants worldwide. The plant will be sited at Rayong, next door to the vehicle assembly plant which opened in 2000.

In addition to the new engine plant, the assembly plant is to be retooled for production of the next generation of the Chevrolet Colorado pickup, which is sold in Thailand and will be exported from there around the world.

The engine plant will make more than 100,000 engines a year of 2.5 and 2.8 litre size from 2010, with the Colorado an early adopter of the engines. The new engines are designed by GM with VM Motori, the Italian group where GM bought a 50 per cent stake last year.

Wagoner said: "Diesel engines play a very important role in GM's global advanced propulsion strategy." He was in Thailand for the ceremonial pouring of the first concrete on the engine plant.