Chinese automaker JAC Motors said Friday it will invest $500 million to build a factory in Brazil's northeastern Bahia state, its first outside China.

The factory, slated to open in 2014, will have the capacity to produce 100,000 units, Jianghuai Automobile Co. said in a statement. A total of 3,500 jobs are expected to be created.

The investment will be made by the parent company in China together with the SHC Group, which represents its business interests in Brazil.

In August, the company put the preliminary value of its investment at $900 million.

The deal had been called into question when the Brazilian government decided to raise taxes on imported vehicles not built with at least 65 percent of the parts made in Brazil or coming from Mercosur countries.

The decision was aimed at blocking a flood of Chinese automobiles into Brazil, now the world's number four car market. It means JAC Motors will have to pay higher taxes until its Brazilian factory is operational.

Sergio Habib, president of JAC's Brazil operations, said he hoped Brasilia would reconsider the higher taxes now that JAC's investment plans are confirmed.

JAC has entered the Brazilian car market with competitive prices compared to offerings from industry heavyweights General Motors, Volkswagen, Fiat and Ford.

Nissan chief executive Carlos Ghosn said Thursday that his company would invest $1.5 billion in a new factory in Brazil expected to produce 200,000 cars per year as the Japanese automaker looks to triple its market share.

France's Renault, which has produced cars in Brazil since the late 1990s, said Wednesday it would invest about $265 million in its plant in Curitiba, in Parana state.