Hyundai Motor says in a statement that production at its $600 million plant in the city of Piracicaba will begin in the second half of 2012 and will eventually reach a capacity of 150,000 units a year.

The ground breaking ceremony took place on Friday.

The statement says that the first model to be produced will be a small hatchback designed for the Central and South American markets.

All cars will be flex-fuel models that can run on ethanol, gasoline or any combination of the two.

Hyundai has plants in China, India, Turkey, the US, the Czech Republic and Russia.