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Hyundai to Build US$600 Million
Plant in Sao Paulo, Brazil
Seoul, Korea - Hyundai Motor
Company, South Korea´s largest automaker, has chosen Sao Paulo,
Brazil, as the site for its seventh overseas production base,
completing the company´s expansion in all of the world´s major
fast–growing markets and further diversifying its operations to
seek stable growth.
James Choi, President of Hyundai
Motor Co.´s International Sales Division, and Jose Serra,
Governor of Sao Paulo State, signed a Memorandum of
Understanding today (Thursday, local time) at the Governor´s
palace in Sao Paulo City. According to the initial agreement,
Hyundai Motor will invest about US$600 million into the
wholly–owned subsidiary in the first phase, to build a 100,000
units–a–year plant in Piracicaba City in Sao Paulo State. The
groundbreaking ceremony for the plant is scheduled to take place
as soon as November of this year. Piracicaba City is about 157
kilometers North–West of Sao Paulo City.
Securing sales in emerging markets
such as Brazil, as demand in traditional markets such as the
U.S. and Western Europe stabilize, is key to Hyundai Motor´s
sustainable growth and success. The company´s new plant in
Central & Latin America´s largest market will also enable it to
respond quickly to competition from Toyota and Honda, which are
also seeking to build production facilities in Brazil.
Hyundai Motor, which began
searching for an appropriate site in Brazil since 2006, had
shortlisted three states in Brazil, including Minas Gerais and
Rio de Janeiro. The selection process was long and difficult as
all three states made extremely favorable offers. However,
Hyundai Motor finally decided on the state of Sao Paulo for its
outstanding environment for automobile manufacturing.
"The city of Piracicaba was the
best choice for us because of the city´s skilled workforce, good
distribution network, convenient access to a broad supplier base
and the incentives offered by the state government,"Mr. Choi
said after the signing ceremony. "Hyundai Motor will do its best
to contribute to the local economy and community by operating an
efficient and successful plant."
In the first phase, Hyundai Motor
plans to produce an all–new flex–fuel car (which can run on both
gasoline and ethanol) in the B–segment, starting from the first
half of 2011, to satisfy the high demand for small cars in
Brazil. Last year, B–segment vehicle sales took up 65 percent of
total sales in the South American country. Hyundai Motor´s new
plant may also directly and indirectly create about 4,000 new
In the second phase, depending on demand
in the region, Hyundai Motor plans to expand the plant, to increase its
line–up and export to neighboring nations. Despite the relatively high
import tax of 35 percent, Hyundai Motor has sold 36,006 vehicles in
Brazil in the first eight months of this year, nearly triple the amount
sold a year earlier.
(Sept 18, 2008)