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.

Edward Niedermeyer
Edward Niedermeyer

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  • Strafer Strafer on Feb 27, 2011

    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?

  • Teddyc73 As I asked earlier under another article, when did "segment" or "class" become "space"? Does using that term make one feel more sophisticated? If GM's products in other segments...I mean "space" is more profitable then sedans then why shouldn't they discontinue it.
  • Robert Absolutely!!! I hate SUV's , I like the better gas milage and better ride and better handling!! Can't take a SUV 55mph into a highway exit ramp! I can in my Malibu and there's more than enough room for 5 and trunk is plenty big enough for me!
  • Teddyc73 Since when did automakers or car companies become "OEM". Probably about the same time "segment" or "class" became "space". I wish there were more sedans. I would like an American sedan. However, as others have stated, if they don't sell in large enough quantities to be profitable the automakers...I mean, "OEMs" aren't going to build them. It's simple business.
  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.