Brazil’s booming economy received a further boost recently with the news that the South Korean car manufacturer, Hyundai, is to locate its first Latin American manufacturing plant in Piracicaba in Sao Paulo State. It’s a perfect subject for an English conversation class.

Let’s read Hyundai’s press release on the launch and then answer some questions based on it:

The Hyundai Santa Fe.

(Seoul, Korea) Hyundai Motor Company, South Korea´s largest automaker, has chosen Sao Paulo, Brazil, as the site for its seventh overseas production base, completing the company´s expansion in all of the world´s major fast–growing markets and further diversifying its operations to seek stable growth.

James Choi, President of Hyundai Motor Co.´s International Sales Division, and Jose Serra, Governor of Sao Paulo State, signed a Memorandum of Understanding today (Thursday, local time) at the Governor´s palace in Sao Paulo City. According to the initial agreement, Hyundai Motor will invest about US$600 million into the wholly–owned subsidiary in the first phase, to build a 100,000 units–a–year plant in Piracicaba City in Sao Paulo State. The groundbreaking ceremony for the plant is scheduled to take place as soon as November of this year. Piracicaba City is about 157 kilometers North–West of Sao Paulo City.

Securing sales in emerging markets such as Brazil, as demand in traditional markets such as the U.S. and Western Europe stabilize, is key to Hyundai Motor´s sustainable growth and success. The company´s new plant in Central & Latin America´s largest market will also enable it to respond quickly to competition from Toyota and Honda, which are also seeking to build production facilities in Brazil.

Hyundai Motor, which began searching for an appropriate site in Brazil since 2006, had shortlisted three states in Brazil, including Minas Gerais and Rio de Janeiro. The selection process was long and difficult as all three states made extremely favorable offers. However, Hyundai Motor finally decided on the state of Sao Paulo for its outstanding environment for automobile manufacturing.

“The city of Piracicaba was the best choice for us because of the city´s skilled workforce, good distribution network, convenient access to a broad supplier base and the incentives offered by the state government,” Mr. Choi said after the signing ceremony. “Hyundai Motor will do its best to contribute to the local economy and community by operating an efficient and successful plant.”

In the first phase, Hyundai Motor plans to produce an all–new flex–fuel car (which can run on both gasoline and ethanol) in the B–segment, starting from the first half of 2011, to satisfy the high demand for small cars in Brazil. Last year, B–segment vehicle sales took up 65 percent of total sales in the South American country. Hyundai Motor´s new plant may also directly and indirectly create about 4,000 new jobs locally.

In the second phase, depending on demand in the region, Hyundai Motor plans to expand the plant, to increase its line–up and export to neighboring nations.

Despite the relatively high import tax of 35 percent, Hyundai Motor has sold 36,006 vehicles in Brazil in the first eight months of this year, nearly triple the amount sold a year earlier.

According to the press release what factors led Hyundai to locate a plant in Brazil?

How does Mr. Choi say the plant will benefit the city?

How will the new cars be fueled?

What does Hyundai hope to achieve with this new plant?

What factors do you think led Hyundai to locate its new plant in Brazil?

Highly educated local workforce in relevant fields such as engineering.

The popularity of the Hyundai brand of cars in Brazil.

Growing population in Brazil which suggests high future demand for cars.

Brazil is a top producer of ethanol, the fuel used to run Hyundai’s cars.

Current economic stability in Brazil.

Tax breaks from the Brazilian government benefiting Hyundai.

How do you think the arrival of Hyundai will benefit Piracicaba?

Increased employment in the area.

Hyundai’s investment in the region for example in infrastructure will benefit everyone living there.

The requirement of fluency in English set out by Hyundai will encourage staff to learn the language and raise the overall standard of English spoken in the area.

What advice would you give Hyundai as the company begins operations in Brazil?

One Brazilian student of mine said that he would advise Hyundai to adapt itself to Brazilian working conditions and expectations rather than enforcing a foreign work ethic onto Brazilians. Is this viable? What do you think?

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