Toyota Motor Corp. announced on Wednesday that it would invest 1.7 billion reais ($337.68 million) in the Brazilian manufacturing of a new hybrid, flex-fuel compact car with an electric motor.

The Japanese automaker has placed a significant wager on the South American market, where most automobiles can operate on 100% ethanol. In 2019, it introduced Brazil’s first hybrid flex-fuel vehicle, a variation of its flagship sedan, the Corolla.

Competitors Ford and General Motors (NYSE:GM), located in the United States, have concentrated on entirely electric vehicles, while Stellantis and Volkswagen (ETR:VOWG_p) have invested in the technology.

Tarcisio de Freitas, the governor of Sao Paulo, and Rafael Chang, the company’s local manager, attended the occasion where Toyota announced. About 1 billion reais of the investment will come from Toyota’s tax credits with the state.

Toyota continues to invest in technology and innovation to suit consumer expectations because it “believes in the Brazilian market,” according to Chang. It is a long-term solution that boosts economic growth and employment.

The Sao Paulo state government announced in a statement that Toyota’s Porto Feliz facility will build the engines for the new tiny automobile, whose name was not disclosed. This move is anticipated to generate 700 jobs.

It added that the car is set to be launched in Brazil in 2024 and sold in 22 Latin American countries.