Hyundai to reignite Brazil’s mobility push with $1.1 billion investment

South Korea’s top automaker Hyundai Motor Co. said on Friday it will invest $1.1 billion in Brazil to reinvigorate the South American country’s car industry, which is swiftly adopting electrification in line with its carbon neutrality targets.

During a courtesy call to Brazilian President Luiz Inacio Lula da Silva on Thursday, Hyundai Motor Group Chairman Chung Euisun also promised the group's active support in Brazil’s eco-friendly future mobility projects, including the introduction of hydrogen-powered vehicles and small modular reactors (SMRs).

“We support the Brazilian government's decarbonization policy and if Hyundai has anything to contribute to Brazil’s hydrogen and eco-friendly mobility projects, we will actively participate,” Chung said during his meeting with the Brazilian president at his office in Brasilia.

With the $1.1 billion investment, to be made by 2032, Hyundai said it aims to revolutionize Brazil’s automotive industry with a focus on eco-friendly vehicles, including those powered by hydrogen.

Brazil’s presidential office said the investment would focus on technology, particularly in the development of hybrid, electric and green hydrogen vehicles.

“A stable and promising country attracts additional investments. It is another significant company growing in our nation,” the Brazilian president said in his X post, referencing Hyundai Motor after meeting with Chairman Chung.

During the high-profile meeting, the Hyundai Motor chief said the Korean automaker will support Brazil’s advancements in next-generation mobility solutions such as advanced air mobility (AAM) and air taxis and the development of SMRs as a stable power source.

“AAM is a future transportation system suitable for Brazil. We also hope to collaborate with Brazil in SMR projects,” he said after briefing the Brazilian president about the SMR business undertaken by Hyundai’s affiliates.

BRAZIL’S ‘MOVER’ PROGRAM

Beyond the immediate economic boost and job creation, Hyundai’s initiative aligns with global efforts to combat climate change, making it a pivotal moment for Brazil, analysts said.

With a population of 210 million at the end of 2022, Brazil is South America's wealthiest country boasting a GDP of $1.9 trillion. It is the world's eighth-largest car producer.

The Brazilian government is implementing various eco-friendly policies to halve its greenhouse gas emissions by 2030 compared to 2005 levels and achieve carbon neutrality by 2050.

Last year, the government announced the “National Green Mobility and Innovation Program (MOVER),” which will provide 19 billion Brazilian real ($3.8 billion) to automakers and related firms investing in decarbonization projects.

After meeting with Chung, Lula da Silva said his government pledged to strive for tax reforms and improvement in the investment environment.

HYUNDAI, KIA TO LAUNCH 3 NEW MODELS IN BRAZIL

Hyundai Motor and its sister firm Kia Corp. plan to bring their three latest electric models to Brazil this year – the Hyundai IONIQ 5 crossover, the Hyundai Kona Electric and the Kia EV5.

Boasting a 12% share of Brazil’s automotive market in 2022, Hyundai Motor aims to further cement its presence in the region with the new vehicles.

The Korean carmaker currently operates a production plant in Piracicaba, São Paulo, with an annual production capacity of 210,000 units. The factory is Hyundai’s sole manufacturing base across the Central and South American region.

Fueled by models tailored for the local market such as the Creta SUV and the HB20 mini sedan, Hyundai sold 187,000 vehicles in 2022, ranking fourth.

HYUNDAI’S SOCIAL RESPONSIBILITY PROGRAMS IN BRAZIL

Hyundai Motor chief Chung said the company will also strengthen its corporate social responsibility programs in Brazil.

The Korean carmaker has been operating the “Sorisso Cidadao” program in Piracicaba for 10 years, having so far provided free dental services to over 70,000 children and public safety officers there. Hyundai also provides science, technology and coding classes to public school students in the city in São Paulo state.

Also, Hyundai has initiated the “Ionic Forest Campaign” to restore tropical rainforests and joint research projects with local institutions including São Paulo University.

Chung’s meeting with Lula da Silva was attended by Brazil’s Vice President of the Republic and Minister of Development, Industry, Commerce and Services Geraldo Alckmin, and Hyundai Motor’s Global Chief Operating Officer Jose Munoz.

During his stay in Brazil, Hyundai Motor chief Chung is scheduled to meet with São Paulo Governor Tarcísio de Freitas.

Write to Jae-Fu Kim at hu@hankyung.com

In-Soo Nam edited this article.