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Hyundai Motor Manufacturing Czech Starts
Work on New Plant Construction
Hyundai Motor Co. today broke ground
for the construction of its 1.1 billion Euro manufacturing plant
in Nosovice, Czech Republic. When completed in March 2009,
Hyundai Motor Manufacturing Czech (HMMC), a fully-owned
subsidiary of Seoul-based Hyundai Motor Co., will have the
capacity to build 200,000 vehicles annually beginning with the
i30 C-class five-door hatchback and a yet-to-be-revealed compact
minivan (codenamed YN). In the second phase, an additional
100,000 units per annum of capacity will be added by 2011 to
build a third model.
The newly established manufacturing arm
will strengthen Hyundai's price competitiveness and enhance
awareness of the Hyundai brand, thus enabling Hyundai to compete
on an equal footing with other European-based automakers.
"With Hyundai´s accumulated
manufacturing experience in Korea, China, the USA, Turkey and
India, we have created a truly state-of-the-art manufacturing
facility that will set the standard for efficiency and
When combined with the high
capabilities of the Czech worker and the Czech reputation for
excellent craftsmanship, HMMC has the potential to make the
highest quality cars in all of Europe," said Hyundai Motor Co.
Chairman and CEO Chung Mong-Koo.
HMMC and the plant of its affiliate Kia Motors
Slovakia located just 85km away stand to benefit from synergies
generated by their close proximity and the sharing of suppliers and
other support functions.
Eleven key Korean-based suppliers to the
Hyundai Kia Automotive Group are already in operation serving the Kia
Motors Slovakia plant. An additional three have announced intentions to
set up shop in the region, bringing the total to 14.
Hyundai deemed a European manufacturing base
essential in order to face the intensifying competition in the European
C-segment, which accounts for approximately 30 percent of EU sales. As
part of its preparations to better serve the needs of its European
customers, Hyundai Motor Co. invested $50 million Euros in a European
Design and Technical Center which designed the i30 hatchback and estate
wagon. And last year, it opened a new European sales and marketing
headquarters in Offenbach to better support local sales. The Czech plant
is the final link in the chain providing Hyundai will have the full
range of local capabilities to serve the European market from design and
engineering, to production, marketing, sales and after-service.
In the first phase, it is anticipated that
2,845 new jobs will be directly created by the HMMC. An additional 675
jobs will be created by the second phase expansion, bringing total
employment at HMMC to 3,520 people. At the supplier level, it is
anticipated a further 4,000 jobs will be created, providing a
significant impetus to the growth and development of the Czech economy.
In compliance with EU guidelines, Czech authorities extended incentives
valued at 15 percent of the total investment, the maximum permissible
under EU regulation.
A European manufacturing base was deemed
essential in order to achieve Hyundai's long-term sales targets in
Europe. With HMMC coming on-stream in 2009, Hyundai's European sales are
forecast to grow to 620,000 units in 2010. In 2003, Hyundai Motor Europe
sold 300,000 units and in 2006, sales passed the 400,000 mark (including
Russia and Turkey sales).
(April 25, 2007)