German automaker Daimler AG (DAI.XE) Friday said it will invest $194 million at its Detroit Diesel engine plant in Redford, Mi., with the state of Michigan providing $57 million through tax benefits and other measures.

In a statement, Daimler said due to strong demand for BlueTec diesel engines production at the Redford plant will be increased substantially. A large part of the investment will be spent on cylinder head production.

The funds will also be used to redesign the manufacturing facilities, improve the plant's infrastructure and purchase additional machinery. The measures for increasing production capacity will start next month and be finalized in September next year.

Detroit Diesel is a producer of on-highway medium and heavy-duty diesel engines and part of the Daimler Trucks North America operations.

-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com
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