SAO PAULO (Reuters) -Toyota Motor Corp said on Wednesday it will invest 1.7 billion reais ($337.68 million) to manufacture a new hybrid, flex-fuel compact car in Brazil, which will run on both gasoline and ethanol in addition to its electric engine.
The Japanese carmaker has been betting big on the segment in the South American country, where most cars can run on 100% ethanol, having in 2019 launched Brazil's first hybrid flex-fuel vehicle, a version of its flagship sedan the Corolla.
Rivals Stellantis and Volkswagen (ETR:VOWG_p) are also investing in the technology, going against U.S.-based General Motors (NYSE:GM) and Ford, which have focused on fully electric cars.
Toyota's announcement came at an event attended by the firm's local head, Rafael Chang, and Sao Paulo Governor Tarcisio de Freitas. Part of the investment - roughly 1 billion reais - will come from tax credits Toyota had with the state.
"Toyota believes in the Brazilian market and continues to invest in technology and innovation to meet consumer needs," Chang said. "It is a sustainable solution that also creates jobs and economic development".
The Sao Paulo state government said in a statement that engines for the new compact car, whose name was not revealed, will be built at Toyota's Porto Feliz plant, a move expected to create 700 jobs.
The car is set to be launched in Brazil in 2024 and sold in 22 Latin American countries, it added.
($1 = 5.0343 reais)