Hyundai Doubles Down On Chinese Market
Hyundai just started production at its new $790m plant outside Beijing, as it ramps up its bid to become China's largest car manufacturer. Forbes MarketScan reports that initial production at the new plant will be 200k Elantras, ramping up to 300k by 2010. This would give Hyundai's Chinese operations an annual production capacity of 600k, putting it at the top of the Chinese biz in terms of volume. But Hyundai has to match increased capacity with improved sales numbers. The Korean firm's sales were down 20 percent last year, and Chairman Chung Mong-koo has set the ambitious goal of increasing sales in the Middle Kingdom by 64 percent this year and by 100 percent by 2010. The new plant should help meet this goal, says Chung, as its economies of scale should help lower costs and increased capacity means more vehicles can be tailored to the Chinese market. With Chinese sales booming, the opportunity exists for Hyundai to score big sales. With commodity prices rising however, it remains to be seen whether the extra investment actually translates into improved profitability.
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Despite some misgivings, I gotta say doubling down on the Chinese automobile market is like having an 11 with dealer showing 7; you might get majorly screwed but really how can you NOT do it? A no-brainer for Hyundai here.
Anybody got any idea what the Indian and Chinese car sales will be in the next few years? Anybody seen a prediction of what their fuel consumption will be like? Daily production remains the same, X million new vehicles hitting the roads each year, how high will the price of gasoline go up? On top of high oil prices there will be the question of how far behind will American refineries be behind demand? I recognize the value of the NIMBY concerning refineries but why have new ethanol plants been able to grow? No coastal areas where the population is sparse and therefore opposition is lessened?
Gee, I'm wondering aloud here: Will I be the only one who's glad that I bought one of the last Korean-built Elantras?
Wait until they start importing chinese built cars to the US.