Hyundai Motor has opened its own factory in Brazil capable of rolling out 150,000 cars a year. Previously, vehicles were assembled locally by an independent importer and that arrangement continues for some models.
Brazil was the world's fourth-largest car market last year with sales totaling 3.41m vehicles. Car sales are expected to rise to 5m by 2015 to replace Japan in third spot.
Hyunda's new plant in Piracicaba was built on a 1.39 million sq m area and cost US$700m.
"The Brazilian plant will make a large contribution to the country's automotive industry by creating around 5,000 new jobs and nurturing the local parts industry," Hyundai Motor Group chairman Chung Mong-koo was quoted as saying in a press release by Chosun Ilbo.
"Hyundai and Kia sell around 7m vehicles in Korea and overseas while overseas markets account for around 80% of the sales," he added.
The plant exempts Hyundai from the 35% duties Brazil imposes on imported cars. Hyundai now has car plants in China, Russia, India and Brazil, enabling it to adapt more quickly to global and regional economic shocks, analysts said.
The Korean automaker plans is making the HB20 subcompact passenger car at the new plant, a "flex" vehicle that runs on gasoline and bioethanol.
BMW, Volkswagen and Honda also plan to spend US$2.6bn to bolster their presence in Brazil over the next three years.