Honda will invest US$ 200 million at its assembly plant in Sumare, Sao Paulo, this year and next, the Brazilian subsidiary of the Japanese auto maker said on February 9th.

Honda began making its Civic, Fit and Honda City models in Brazil in 1997 and has already invested US$ 784 million in the country since inception.

Although Honda is not one of the top three auto makers in Brazil - trailing far behind General Motors, Fiat and Volkswagen - its investment strategy follows the trend of large brand automotive companies investing in one of the world's hottest car markets.

Last week, Honda announced that it would recall more than 160,000 of its Fit models in Brazil due to a problem with power window switches that can cause fires in a worst case scenario.

Honda's announcement comes just a few hours after Volvo's truck and bus division said it would invest US$ 220 million in Brazil over the next two years.