Hyundai-Kia Completes Global Network
By Ryu Jin
Staff Reporter
Hyundai Motor and Kia Motors, which together form the world’s sixth-largest automotive group, is ratcheting up efforts to complete its global network of production and sales.
As Hyundai-Kia Automotive Group has nearly 30 factories in China, India, the United States and Europe, its overseas production capacity is expected to top 3 million units per year from 2010, according to group officials Monday.
Group Chairman Chung Mong-koo is leading the vanguard of ``global management.’’ He has promoted the group’s global management initiative over the past 10 years, crisscrossing the world from Asia and Europe to North and South America.
In his New Year’s message early this year, the 70-year-old CEO put a renewed emphasis on the group’s endless efforts for global management, based on ``customer-first’’ and ``future-oriented’’ strategies and policies.
``We will have to continue our endeavors to stabilize global management by completing our global network and building an efficient system of cooperation between all overseas bases of production and sales,’’ he said.
Hyundai-Kia Group’s long journey to establish a global network is now in its final phase. Besides major markets like the United States and Europe, the group has also completed preparations for such emerging markets as China and India.
``Our factories in China and India will operate this year; construction of a factory in the Czech Republic is in the final stages and we are set to begin construction of a factory in Russia,’’ a Hyundai Motor spokesman said. ``So, 2008 is an important year for us to see some tangible achievements of our past investments.’’
Hyundai Motor Set to Roar
Hyundai-Kia Automotive Group, which aims to be one of the world’s top five players in the industry within a couple of years, has set a goal to sell 3.11 million units around the world in 2008, up 20 percent from the previous year.
In America and Europe, the group plans to redouble efforts to boost sales through fortifying local dealership networks and, in the longer term, improving its brand image abroad.
Hyundai Motor unveiled its ``Genesis’’ premium sedan early this year to lure luxury customers, while Kia Motors also developed its ``Mohave’’ _ ``Borrego’’ sport utility vehicle in overseas markets.
Expansion of overseas production lines, especially in the United States, was an inevitable choice for the South Korean automotive group to tackle exterior challenges such as unfavorable exchange rates.
In particular, the group needed its own factories in the United States in order to take a firm root there as a top-notch carmaker in the world’s largest automobile market, which accounts for about 30 percent of total global car sales.
Hyundai Motor has already been operating a factory in Alabama since last year. When Kia Motors’ factory in Georgia is completed next year, the group’s total production capacity in the United States would reach 600,000 units per year.
Hyundai-Kia Group has a goal to sell 1.65 million cars in the U.S. market _ 1 million cars for Hyundai Motor and 650,000 cars for Kia Motors _ from 2010 to grab an annual market share of 8.6 percent.
``More overseas production bases were the fundamental solution to the external challenges we faced such as the unstable exchange rate and price increases of raw materials,’’ a group executive said.
Kia Motors is also investing $1 billion in its Georgia factory, which will produce the carmaker’s major models from the latter half of 2009 for sales in the North American market, including Canada as well as the United States.
Hyundai-Kia Group officials expect Kia Motors’ factory, currently under construction, to have synergy with Hyundai Motor’s Alabama factory, which came into operation in 2006, since they are only 134 kilometers away from each other.
They could share auto parts and reduce costs for the development of new models to acquire a stronger competitive edge in the market.
``Our top priority is given to the development of higher-quality vehicles here in the U.S.,’’ a Hyundai Motor official in the United States said. ``We cannot survive the fierce competition without endless efforts for quality improvement.’’
Hyundai-Kia Group has also been expanding its production capacities in China and India to keep up with increasing demands in emerging markets.
Hyundai Motor built its second factory in India last month and is set to complete its second factory in China next month. Kia Motors also completed its second factory in China in the city of Yancheng last December.
``By 2010, Hyundai Motor and Kia Motors would have a total production capacity of 6 million cars per year,’’ a group spokesman said. ``This means that nearly half of our vehicles will be produced at overseas factories.’’