Hyundai Expands In Europe, Eyes Brazil

Edward Niedermeyer
by Edward Niedermeyer

Hyundai and Kia are on a tear in the European market, having recently passed Toyota to become the best-selling Asian automaker in the EU (at 605,386 units, some 50k away from Daimler’s 2010 sales). And with its first Europe-centric product coming online, aimed at the heart of Europe’s 896k unit midsize segment, it hopes to keep the growth coming. In service of that goal, Hyundai is moving European production of its iX35 (Tucson) CUV from Kia’s plant in Zilina, Slovakia, to its own factory in Nosovice, Czech Republic, and adding an extra shift according to the WSJ. And unlike many of its European competitors, Hyundai is keeping its Euro-zone production capacity on the slim side, importing the forthcoming i40 from South Korea and the i10 from India, helping to keep the Korean automaker out of the overcapacity trap that plagues its competitors. Though Hyundai has good prospects for growth in Europe, production capacity expansions are being targeted at the developing markets that show more promise for growth.

Automotive News [sub] reports that Hyundai is building its first Brazilian plant as part of a strategy to diversify its global production base, an as a way to better position itself for growth in Brazil and across South America. Having recently established plants in Russia, China and India, Brazil is the last piece of the BRIC market puzzle for Hyundai, which is targeting 93k sales there this year (under 3 percent market share) and a six percent market share by 2014. The $600m Piracicaba plant will build a small hatchback for the Brazilian market, at a volume of 150k annual units. According to the report

the completion of the factory will help Hyundai build as many as 4.51 million units worldwide a year by 2012, according to the statement. Production outside South Korea will account for 2.65 million units. Brazil is the seventh country where Hyundai is setting up an overseas production facility.

Hyundai said in September it will complete the construction of its third plant in China with capacity to make 400,000 units a year by 2012. The company has two plants in India with a combined annual capacity to build 600,000 vehicles.

It started operating a factory this year in Russia with a capacity of 150,000 units. The automaker also runs plants in the United States, Turkey and the Czech Republic.

With over half of its production spread around the world, Hyundai is building an important advantage over its competitors which tend to have less globally-diversified production bases.

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    If they played like real soccer would end up as a demolition derby.

  • Herb Herb on Feb 27, 2011

    Smart move. Decent cars with with good reliability at modest prices will sell worldwide. Hyundai as the new real Volkswagen?

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