General Motors says it will invest $250 million to install new equipment and tooling at its CAMI assembly plant in Ingersoll, Ont.
GM Canada says the improvements will enable the plant to build a wider variety of vehicles at a lower cost.
Construction on the project is expected to begin within weeks.
North American auto makers have been gaining momentum recently as the industry recovers from the severe downturn that started in late 2008.
Industry observers have predicted 2013 North American sales will surpass last year's as the U.S. economy revives from the recession.