The Canadian and South Korean governments have signed a memorandum of understanding (MOU) which intends to bring South Korea’s auto manufacturing (Hyundai, Kia) and investment to Canada, according to The Globe and Mail.
Reportedly, the deal stems from the country’s campaign to win a multibillion-dollar contract to build up to 12 submarines for the Royal Canadian Navy.
Canadian Industry Minister Melanie Joly and Korea’s Minister of Trade, Industry, and Resources, Kin Jung-kwan, signed the MOU this week as a South Korean government delegation visited Canada regarding the submarine bid. Hyundai Motor Group executive chair Euisun Chung is also part of the visit.
The agreement notes that both parties will work on “advancing a Korean automotive footprint in Canada” and to pursue “electric vehicle (EV) manufacturing opportunities.”
The agreement also states that the two countries will cooperate on “growing Korea’s battery manufacturing presence in Canada” and on the battery supply chain, including “manufacturing, critical material extraction and refinement, research, development, and extraction.”
Based on current estimates, Hyundai and Kia are likely to be among the main beneficiaries of the deal, given the auto group’s popularity in Canada. Outside of the trip to Ottawa, Hyundai has struggled to get some vehicles north of the border due to tariffs. One example is the Hyundai Santa Cruz, which was so severely affected that 2025 models were not shipped to Canada.
If a Hyundai plant were to be established in Canada, it would most likely be built in Ontario. According to Invest Ontario, the province ranked as the second-highest auto producer in 2024, with 1.3 million vehicles built. There are also several plant options available, with the American Big Three scaling back operations in the province. Rumours have circulated that General Motors may sell the CAMI plant in Ingersoll, Ont., leaving its future uncertain.
Most likely, tariff-affected models like the doomed Santa Cruz or the potential body-on-frame Hyundai pickup will be built in the province, but EV manufacturing opportunities suggest that something from Hyundai’s Ioniq lineup could be built on Canadian Soil.
Source: The Globe and Mail
Image Credit: Shutterstock
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