Toyota ups its bet on hybrids in Brazil with US$2.2bil plan
Brasilia: Toyota Motor Corp is increasing its bet on flex fuel-hybrid vehicles with an investment of 11 billion reais in its Brazilian operations between 2023 and 2030.

The Japanese automaker will use the money to expand production capacity in Latin America’s largest economy for models that use hybrid-flex fuel technology.

Of the total amount, five billion reais is confirmed until 2026 and includes the production of a previously announced new compact hybrid-flex vehicle, with production expected to begin in 2025, as well as another model using the same technology that will be developed specifically for Brazil, according to a statement issued Tuesday.

The plan will also see batteries assembled at Toyota’s factory in Sorocaba, beginning in 2026, to equip hybrid vehicles already produced locally.

“We have been carrying out a series of structural reforms for a long time to improve the company’s competitiveness,” Toyota do Brasil president Evandro Maggio said in an interview. “It is necessary to launch new products, adapting to customer needs, to customer demand, demand compliance and market configuration.”

As part of the plan, Toyota will expand its manufacturing facility in Sorocaba, northwest of Sao Paulo, which is currently operating at full capacity.

New facilities will be built on the site, to which production operations from Indaiatuba – also in Sao Paulo state – will be transferred. The change “will occur gradually, starting in mid-2025, with completion scheduled for the end of 2026,” according to the statement.

Toyota’s competitors have also been pumping money into Brazil this year. US giant General Motors Co announced plans to invest seven billion reais in January, with Volkswagen AG of Germany setting aside nine billion reais the following month along with a 5.5 billion reais from South Korea’s Hyundai Motor Co.

All of them are seeking to begin the electrification of their product lines in the Brazilian market, investing in flex-hybrid versions, which combine electric and combustion engines that can be fuelled with gasoline or ethanol. Toyota is a pioneer in the segment, having sold models with this option in Brazil since 2020.

New investments by the automotive industry in Latin America’s largest economy come after President Luiz Inacio Lula da Silva’s government published an incentive programme for new technologies in December.

Dubbed “Mover”, the green-mobility plan includes fleet sustainability requirements and tax breaks for companies that invest in decarbonisation.

It aims to promote expanded investments in energy efficiency, including minimum recycling requirements for vehicle manufacturing and lower taxes for those that pollute less.

Maggio said one of the arguments in favour of investing in Brazil is the country’s expansion of exports, with shipments abroad accounting for 40% of the Brazilian unit’s demand. “As you build your trading power, your regional coverage, investments will happen naturally,” he said.

Multinationals have sped up decarbonisation plans in Brazil after Chinese competitors, such as Great Wall Motor Co and BYD Co, announced plans to produce electrified models in the country.

Toyota’s last investment in Brazil was announced in April last year, when it set aside 1.7 billion reais to produce a new compact flex-hybrid vehicle in Sorocaba and update another model. — Bloomberg
Corporate News,Toyota,Brazil,Investment,FlexFuelHybrid,HybridVehicles,Electrification,LatinAmerica
Toyota Motor Corp is increasing its bet on flex fuel-hybrid vehicles with an investment of 11 billion reais in its Brazilian operations between 2023 and 2030.