* Investment to boost production capacity

* Decision came after agreement with government

German carmaker BMW (BMWG.DE) plans to invest 2.2 billion rand ($288 million) at its Rosslyn plant in South Africa to boost production capacity by 45 percent, boosting capacity to 87,000 units.

BMW said on Monday the decision came after signing a letter of commitment with the South African Department of Trade and Industry.

The BMW Group has never shied away from making decisions for the future in spite of the current tough conditions the motor industry is facing, BMW South Africa's managing director, Bodo Donauer said in a statement.

South Africa's total new vehicle sales fell by 19.5 percent year-on-year in September, showing continued pressure on households as Africa's biggest economy grapples with its first recession in nearly two decades.

The Rosslyn Plant produces the BMW 3 series and almost 75 percent of production is exported -- to Japan, Taiwan, Singapore, Hong Kong, Sub Sahara and Australia. (Reporting by Alison Raymond; Editing by Dan Lalor) ($1 = 07.636 rand)

South Africa