U.S. carmaker Chrysler said here on Friday that it will invest 1.249 billion U.S dollars in northern Mexico to build an assembly plant.

The decision was announced by Sergio Marchionne, CEO of Chrysler, when he met with Mexican President Enrique Pena Nieto.

A total of 1,570 jobs will be created thanks to the investment in Saltillo, a city in the northern state of Coahuila, Marchionne said.

The new plant will have a positive effect on the supplier chain and other businesses, and can increase Mexico's overall global competitiveness, said Marchionne, who revealed that Chrysler invested about 10.4 billion U.S dollars in Mexico last year.

According to Nieto, Mexico is the eighth largest automobile producer in the world, ranking fourth as an exporter and fifth as a producer of car parts for both domestic and international markets.

The auto industry accounts for 26 percent of Mexico's total exports, said Economy Minster Ildefonso Guajardo.