Great Wall Motors has inked a deal with German carmaker Daimler AG to purchase its plant in Brazil, which will mark the Chinese carmaker's arrival in Latin America's largest economy.

The Iracemapolis plant, in the state of Sao Paulo, will be handed over to Great Wall Motors within this year together with the staff and equipment, said the carmaker in a statement on Wednesday.

The plant produced Mercedes-Benz vehicles from 2016 to 2020. Daimler said in December that a drop in sales of luxury cars during the COVID-19 pandemic had made it unsustainable to keep the factory open.

Great Wall Motors said the two carmakers started negotiations in late 2020 but neither disclosed the sum of the deal.

Great Wall Motors said it will introduce the latest technology and equipment into the plant. After a four-to-six-month renovation, it will be able to produce up to 100,000 vehicles a year and employ over 2,000 people.

Liu Xiangshang, vice-president of the carmaker, said Great Wall Motors sees Brazil, the world's seventh largest vehicle market, as a strategically important overseas market.

"Our investment will bring smart, safe and advanced mobility experiences for local people.

"We will create job opportunities directly and indirectly and stimulate the demand for the industrial chain, which will help local industrial upgrading and generate more taxes for the local government, " said Liu.

The carmaker will invest up to 5 billion yuan ($770 million) in the plant in five years and make it one of its global smart production bases.

Great Wall Motors said the plant will produce SUVs, pickups and electric vehicles in the beginning local customers and those in other South American markets.

The carmaker has been exporting vehicles to South America for over a decade, which it said will be an important pillar for its global sales goal of 4 million vehicles by 2025.

Great Wall Motors has been stepping up its overseas strategy in recent years. Besides Brazil, it now has car-producing plants in countries including Russia, Thailand and India.

The carmaker's overseas sales reached over 74,000 vehicles in the first seven months this year, up 176.2 percent from the same period last year. Its global deliveries totaled 709,766 units from January to July, up 49.9 percent year-on-year.