Toyota Motor said it would build a hybrid version of the redesigned Corolla sedan in Brazil that will run on electricity, ethanol and petrol, claiming it would be the first vehicle of its kind in the world.

Brazil, South America's largest vehicle producer, has largely resisted the shift towards electric and hybrid vehicle production that has swept through more developed markets, a Reuters report noted.

General Motors and Volkswagen have said they will import electric vehicles into the country but do not plan to make them locally.

The announcement was made during a news conference hosted by Sao Paulo state governor Joao Doria, Reuters said. Toyota said the car would be produced in that state, at its Indaiatuba plant, on which it will spend BRL1bn (US$254.73m).

Toyota said in a statement cited by the news agency it made the decision to build the Corolla in Brazil partly due to the 'Rota 2030' package of tax incentives passed by the country's congress.

Unlike most markets around the world, ethanol is a common car fuel in Brazil which makes it from sugar cane rather than corn, as in the US.

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Toyota already sells the imported Prius hybrid in Brazil, Reuters added.