General Motors will invest an additional 700 million reais ($384.62 million) to modernize and boost production at a plant in Brazil, one of the world's largest auto markets, the company said on Monday.

The investment will be used to renew the current line of production at the Sao Caetano do Sul plant in Sao Paulo state that produces models including Classic, Corsa, and Vectra, the U.S. automaker said in a statement.

Brazil is GM's third largest market after the United States and China. The company had sales of 206,600 cars in the first quarter of 2010, a 26 percent increase over the previous year.

Global automakers are expected to invest up to $11.2 billion in Brazil over the next two years to meet demand for vehicles in Latin America's largest economy.

In late March, GM said it would invest 1.4 billion reais to modernize and expand its Sao Caetano do Sul and Mogi das Cruzes plants, both in Sao Paulo state.

The investment focuses on the renewal of the Chevrolet production line, including two new models to be produced for the Brazilian market and for export.

The new funds for the plant are part of a long-term strategy of investments of 5 billion reais between 2008 and 2012 to increase production capacity and renew the company's portfolio of Chevrolet vehicles in the South American country.

Brazil is also a major market for Italy's Fiat SpA, Germany's Volkswagen AG, and U.S.-based Ford Motor Co.

Automobile output in Brazil, the world's fifth-biggest auto market, jumped 14.2 percent in April from a year earlier to 290,000 units as automakers pushed up production to meet a surge in demand in export and local markets.

($1=1.82 reais)

(Reporting by Luis Andres Henao; Editing by Derek Caney)