Hyundai Motor Group Chair Chung Eui-sun visited the Brazil plant, a key base in Latin America, to review mid- to long-term growth strategies. Brazil is the world's No. 6 auto market, where competition has intensified recently due to low-price offensives by Chinese automakers. Chung plans to seek new growth in mobility and eco-friendly energy.
According to Hyundai Motor Group on the 30th, Chung, who traveled as part of the business delegation aligned with President Lee Jae-myung's state visit to Brazil, separately visited Hyundai Motor's Brazil plant in Piracicaba, São Paulo state, on the 27th (local time). Since its completion in 2012, the site has produced 200,000 Brazil-strategy vehicles annually and also houses a Latin America regional research and development (R&D) center.
Chung told employees, "There are many challenges and tasks as Brazil faces changes in its industrial environment and a new competitive phase, but overcoming this crisis is necessary for the next stage of growth and a leap forward," and added, "We will provide active support at the group level so we can achieve a bigger leap in Brazil."
As of last year, Brazil ranked No. 6 globally with annual auto demand of 2.5 million vehicles and No. 8 in auto production with 2.6 million vehicles a year. It is also a resource powerhouse, with the world's No. 2 rare earth reserves and more than 20% of global graphite reserves, making it an essential supply chain hub for EV batteries and renewable energy industries.
In particular, Brazil has a unique fuel system in which "FFV," which uses both gasoline and ethanol, accounts for most auto demand, and auto import tariff is as high as 35%, making localized production essential. Another reason local production is needed is that since the end of 2023, Brazil has been granting tax cut and subsidies to automakers investing in decarbonization.
In response, Chinese companies are expanding sales in Brazil through low prices and large-scale local investment. The Brazilian government temporarily exempted eco-friendly cars from tariff until 2023, and Chinese firms used this window to sharply increase local sales of eco-friendly vehicles. When these benefits ended, Chinese companies shifted strategy to building local plants. BYD, which acquired a Ford plant closed in 2021 and began production last year, is a prime example. BYD was only the No. 8 brand in Brazil as of last year, but climbed to No. 4 in the first half of this year. With Hyundai Motor maintaining a top-five position since 2020, Chinese companies have begun to emerge as direct competitors.
Hyundai Motor plans to pursue a strategy of ▲ expanding its sport-utility vehicle (SUV) lineup ▲ introducing eco-friendly vehicles optimized for Brazil ▲ building a hydrogen business base. Chung urged researchers at the R&D center to "strengthen local R&D functions and push powertrain localization more aggressively to secure sustainable mid- to long-term business competitiveness."
Hyundai Motor aims to sell 204,000 vehicles in Brazil this year, led by the i20 launched in June and the popular SUV Creta. It already set a record in the first half by selling 96,723 vehicles. In particular, Hyundai Motor plans to roll out SUV models across various segments centered on the Creta through 2030. This follows projections that SUVs will account for 51.2% in Brazil by 2030.
It will also push to expand sales of eco-friendly vehicles. To address import tariff on foreign cars, Hyundai Motor is exploring local production of small-segment EVs while accelerating development of a dedicated hybrid (FFV-HEV) powertrain based on gasoline-ethanol fuel. Reflecting Brazil's fuel ecosystem, the FFV-HEV is a Brazil-only eco-friendly vehicle that the company plans to apply to the popular SUV segment and launch quickly.
Alongside this, Hyundai Motor will pursue the establishment of a local hydrogen and renewable energy ecosystem centered on Brazil, which is leading the renewable energy market in Latin America over the mid to long term.
A renewable energy powerhouse, Brazil is strategically fostering the hydrogen industry at the national level. In line with this, Hyundai Motor, together with group affiliates, plans to actively develop new businesses in hydrogen and renewable energy, including pioneering new markets for hydrogen commercial vehicles and hydrogen trams, as well as green hydrogen production, Hydrogen Fuel Cell system supply, and renewable power plant construction.