Euisun Chung charts new Brazil strategy around SUVs, eco-friendly vehicles and hydrogen

Hyundai Motor Group Chairman Euisun Chung has overhauled the group's Brazil strategy. Built around three pillars — SUVs, Brazil-tailored eco-friendly vehicles and hydrogen — the plan aims to transform Brazil from a simple production base into a core hub for future mobility and energy business.

Chung visited Hyundai Motor's plant in Piracicaba, São Paulo state, on Monday (local time) to personally review production and sales strategies and mid- to long-term growth plans, Hyundai Motor Group said Thursday. The factory visit came as Chung traveled to Brazil as part of a business delegation accompanying President Lee Jae Myung on a state visit, and reflected his intent to assess firsthand the changing business environment and future growth strategy in the country.

Brazil is Hyundai Motor Group's key hub in Latin America. As the world's sixth-largest auto market and a resource-rich nation holding critical minerals including rare earths and graphite, it carries high strategic value for the future vehicle and energy industries. Hyundai Motor produces the HB20, Creta and Ioniq 5 at its Brazil plant, with annual output of around 200,000 units. The plant surpassed cumulative production of 2.5 million vehicles in March — 13 years after Hyundai first entered Brazil. During the visit, Chung encouraged local employees who drove those results.

The visit comes against a backdrop of rapidly shifting market conditions. Chinese automakers have not only expanded sales on the strength of low-cost electric vehicles but are also ramping up local production investment, quickly extending their influence. BYD acquired a former Ford plant in Brazil and began production there, lifting its market share from around 5 percent last year to 9.1 percent in the first half of this year. The Chinese brand also overtook Hyundai Motor in brand sales rankings, climbing to fourth place. China's total investment in Brazil last year reached $6.1 billion, a record high.

Hyundai Motor Group responded by rolling out a locally tailored strategy. Chung visited the Latin America research and development center inside the Brazil plant and met with researchers, stressing that "to secure sustainable mid- to long-term business competitiveness, we must strengthen local R&D capabilities and pursue powertrain localization more aggressively." He then inspected the production quality of the i20 and Creta on the factory floor and encouraged workers.

The first pillar of Hyundai Motor Group's strategy is strengthening its SUV lineup.

Brazil's SUV segment accounted for 43 percent of the total auto market last year and is projected to reach 51.2 percent by 2030. Hyundai Motor plans to boost sales of its flagship compact SUV, the Creta, while introducing a broader range of SUV models by 2030 to capitalize on that growth.

The second pillar is eco-friendly vehicles developed exclusively for Brazil.

Flex-fuel vehicles (FFVs) — which run on a blend of gasoline and ethanol — dominate the Brazilian market. Hyundai Motor is accelerating development of a dedicated FFV-based hybrid (FFV-HEV) powertrain tailored to local fuel conditions. The system is being developed as a Brazil-exclusive eco-friendly vehicle and will be applied first to SUVs, the country's most popular segment.

The company is also exploring local production of electric vehicles. Brazil imposes a 35 percent tariff on imported eco-friendly vehicles, making domestic production essential to price competitiveness.

Hydrogen is the area where Chung is investing the most effort.

Hyundai Motor Group has drawn up a mid- to long-term strategy to build a hydrogen ecosystem across Latin America, centered on Brazil. The plan combines fuel cell technology with the capabilities of group affiliates to create an integrated ecosystem spanning hydrogen production, storage, distribution and end use.

The group intends to open new mobility markets with hydrogen commercial vehicles and hydrogen trams, while expanding into green hydrogen production, fuel cell system supply and renewable energy power plant development. It also plans to deepen industry-academia partnerships with institutions including the University of São Paulo.

Brazil's pro-environment policy agenda adds further momentum to Hyundai Motor Group's strategy. The Brazilian government is nurturing a low-carbon hydrogen industry through its National Hydrogen Program and offers a range of incentives to companies investing in eco-friendly vehicles under its Mover policy. Hyundai Motor Group plans to leverage these policies to expand both local production and its hydrogen business simultaneously.

Hyundai Motor sold 96,723 vehicles in Brazil in the first half of this year, its best first-half performance since 2019. The figure represents a 12.1 percent increase from the same period last year. The HB20 sedan and hatchback led sales with 59,518 units, followed by the Creta at 35,925 units, and the brand held fifth place in the overall rankings.

Hyundai Motor will use the i20 — which entered production in June — to sharpen its push into Brazil's B-segment market. Through marketing tied to travel, retail and entertainment, the company is targeting full-year Brazil sales of 204,000 vehicles.

At a meeting with plant employees, Chung said: "There are many challenges and tasks amid the changing industrial environment and new competitive landscape in Brazil, but overcoming them is what makes the next stage of growth and leap forward possible. We will actively support you at the company-wide level so that we can achieve an even greater leap in Brazil."

Meanwhile, Hyundai Motor is deepening community engagement through locally rooted social contribution programs. Since 2022, it has run the "Ioniq Forest" campaign to plant 100,000 trees, and since 2014 it has provided free dental care to local residents through a mobile dental clinic program called "Sorriso Cidadão."

The Brazil plant is the only automaker in Brazil to have received a "best ethical management company" certification in the past decade, and has been named a "great place to work" for nine consecutive years. It has also concluded wage negotiations without labor disputes for 15 consecutive years, cementing its standing as a leading manufacturer in the country.