Honda Motor Co. said Friday that it will invest 4.2 billion reals ($803 million) in Brazil in a bid to boost its production of "flexible-fuel vehicles," which are powered by both gasoline and ethanol.

Following the announcement, Brazilian President Luiz Inacio Lula da Silva released a statement welcoming Honda's investment plan, which is expected to create around 1,700 new jobs at its factory in Sao Paulo.

In Brazil, flexible-fuel vehicles have become more popular as they can run on bioethanol produced by fermenting botanical resources such as sugar cane.

The Brazilian government has been focusing on spurring investment to help the country's automobile industry, prompting major Japanese car manufacturers to expand their business.

==Kyodo

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