South Korea has pledged to develop auto manufacturing plants in Canada under a new memorandum of understanding between the two countries.

The MOU follows recent high-level talks designed to advance South Korean automaking and future-mobility investment in Canada as part of a new bilateral agreement still to be negotiated. The effort comes as Canada seeks new alternative auto investment following the closures, relocations south and curtailments of plants owned by U.S. and other international automaker

Canadian Industry Minister Mélanie Joly met recently with a South Korean delegation led by Hoon-Sik Kang a presidential envoy and chief of staff to the Asian country’s president. Discussions focused on expanding bilateral industrial co-operation in strategic sectors, including auto and battery manufacturing, critical minerals, AI and trade, said the Canadian government.

During the visit, Joly and Jung-Kwan Kim, South Korea’s minister of trade, industry and resources signed the MOU, which aims to strengthen Canada-South Korean industrial collaboration on future mobility and establish a bilateral industrial co-operation committee.

Prime Minister Mark Carney’s government said the MOU builds on the Canada-Korea Comprehensive Strategic Partnership and emphasizes economic growth and supply-chain resilience. It includes plans to establish a Canada-South Korea industrial-collaboration forum on future mobility and outlines intentions to advance a Korean automotive industrial footprint in Canada, alongside domestic EV manufacturing opportunities. Ottawa said the agreement also aligns with efforts to attract automotive investment that reinforces Canada’s battery-supply chain, including battery production, battery-materials processing and the refinement, processing and recycling of Canadian critical minerals.

The agreement is also intended to strengthen co-operation on clean- energy transition, energy security and critical-mineral supply chains, while supporting job creation and long-term economic resilience.

“Canada is an auto nation and home to world–class workers, cutting–edge innovation and some of the best vehicles manufactured anywhere in the world,” said Joly. “This new memorandum of understanding with Korea strengthens that legacy and positions Canada to lead in the next generation of automotive excellence. By deepening cooperation in EV and hydrogen mobility, expanding battery and critical mineral partnerships, and attracting high–value investment into Canadian communities, this agreement will grow our auto sector, create good jobs and reinforce Canada’s position as a global leader in future-ready vehicle manufacturing.”

Energy and Natural Rexources Minister Tim Hodgson said the agreement also reflects Canada’s strategic approach to building a secure, competitive and sustainable energy future.

“Canada and the Republic of Korea are trusted partners, and by deepening cooperation on critical minerals, clean-energy technologies and energy security, we are diversifying our exports and strengthening resilience on both sides of the Pacific,” he said.

The collaboration also attracts long-term investment and positions Canada as a reliable supplier for the global clean-energy transition, he added.

The auto industry contributes $16.8 billion to Canada’s GDP and supports more than 550,000 jobs. Under Canada and South Korea’s free-trade deal, bilateral merchandise trade reached $24.5 billion in 2024. The deal was implemented in 2015.

In 2024, 12%, or 228,257, of all vehicles sold in Canada were manufactured by South Korean automakers. Since 2020, South Korean companies have committed billions of dollars in investments in Canada’s emerging battery ecosystem. The firms include LG Energy Solution, POSCO Future M, EcoPro BM and Volta Energy Solutions.

This spring, Canada’s International Trade Minister Maninder Sidhu, will lead a trade mission to South Korea to build on the Asian country’s investment in the Canadian auto sector.

Pictured: Newly made Hyundai vehicle.

Photo: Hyundai