The Argentine unit of General Motors Corp. (GMGMQ) is sound and unaffected by the U.S. company's decision to file for bankruptcy Monday, the division said Tuesday in a statement.

"GM Argentina is a legally distinct entity, and is economically and financially solvent thanks to our healthy balance in the region," GM Argentina said in a statement posted online.

GM's Latin American operations, including its business in Brazil, appear to be one of the few bright spots for the U.S. automobile maker.

GM Argentina President Edgar Lourencon told local media Monday that the company's operations in Argentina and Brazil accounted for 60% of the $1.3 billion in profit generated by the company's Latin American units last year.

"GM Argentina maintains its commitment to invest in the country, developing a new compact regional model in our Rosario industrial plant whose production will begin towards the end of 2009," the company said.

In 2007, then GM Chief Executive Rick Wagoner announced plans to invest $500 million in Latin America. The plan called for investing $400 million to develop the new product line, which would be sold in Latin America and exported to other emerging market countries.

The investment was to be divided between GM's Rosario plant in Argentina and the Sao Caetano do Sul plant in Brazil, with each plant receiving about $200 million to modify and expand production lines for the new vehicle.

Lourencon said Monday that GM will receive fresh funds from the Argentine government to help carry out the originally announced plan for the Rosario plant.

Argentine President Cristina Fernandez is expected to announce that the government will provide around $55 million in funding to help GM develop a new small vehicle.

Multiple media outlets have reported that Italy's Fiat SpA (FIATY) has offered to take over GM operations both here and in Brazil. A spokesperson for GM Argentina declined to comment about such an offer and Fiat Argentina couldn't be reached for comment.

Despite GM Argentina's strength relative to its parent, the company has suffered from Argentina's economic slowdown and a sharp decline in demand for new cars.

Argentina's auto sales fell 29.17% in April compared with the same month a year ago, according to the car dealership association Acara. April's decline was more than triple the annual decline seen in March, when sales fell 8.7%.

Meanwhile, Argentina produced 37,262 cars in April, down 31.8% on the year, according to the automotive manufacturers association, or Adefa.

-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; taos.turner@dowjones.com