PSA Peugeot Citroen Group aims to produce 300,000 vehicles per year and increase its production of engines from 280,000 to 400,000 per year by then, Peugeot's head of Latin American operations, Carlos Gomes, announced Wednesday.

"This is a long-term investment, as we believe in the market," Gomes told reporters. The agreement was signed by Brazilian President Dilma Rousseff and the visiting chairman of Peugeot's supervisory board, Thierry Peugeot.

Peugeot plans to invest some $240 million per year as part of the expansion, for a total investment of $940 million by 2015, a spokesman told AFP.

The company currently produces some 150,000 vehicles per year in South America's largest country, where it is the fifth largest producer, accounting for 5.3 percent of the market.

Brazil represents five percent of the company's world sales and is projected to grow to between seven and eight percent by 2015, Gomes said.

The latest move is part of a broader shift to emerging markets, with sales outside Europe expected to account for half the company's business by 2015.