Fiat Chrysler Automobiles announced plans to pump 4.5 billion dollars in the Michigan automotive industry, which will create 6,500 new jobs.
The carmaker said it would build the first new plant in Detroit for almost three decades.
This is an incentive for the region after General Motors announced it would close two locations in Michigan as part of a wider restructuring plan that costs 14,000 jobs.
GM's decision at the end of last year triggered a fire by US President Donald Trump.
The US president is putting pressure on the automotive industry to build vehicles in the US.
GM has accused the movement of changing the preferences of sedan users to bigger jeeps.
Larger cars such as SUVs and trucks already account for nearly 70% of North American car purchases,
Fiat Chrysler said his investment in Michigan was part of his strategy for expanding SUV and Ram brands.
The company will turn two of its plants, one of which has been inactive since 2012, at the new Jeep Grand Cherokee installation site and a new three-row SUW SUW.
It will also be equipped to build electric hybrid vehicles.
Fiat Chrysler said the new facility would be the first assembly plant to be built in the city of Detroit since 1991 when its Jefferson North facility was built.
As a result of investment at five of its Michigan factories, Fiat Chrysler said it would no longer move the production of its Ram truck from Saltillo, Mexico, to the US.
Trade talks for Trump
The company had promised to move its production to Warren, near Detroit, by 2020, which had won praise from Mr. Trump.
Meanwhile, the president threatened to "discard the tariff" from the European Union as part of the trade talks that could impose US duties on imports of European cars from 10% to 25%.
The US wants to include agriculture as part of the trade talks, but Brussels refuses. The EU wants to negotiate lower car tariffs.
At a meeting with US Governors on Monday, Mr Trump said: "The European Union is very, very difficult, very, very difficult, they do not allow our products to enter the country.