Hyundai-Kia to Keep Focus Overseas
By Kim Hyun-cheol
Staff Reporter
The once aggressively expanding Hyundai-Kia Automotive Group is now poised to streamline its organization to cope with the current global economic slowdown.
Hyundai cut back its strategic planning sections earlier this week, followed by a similar move at Kia Motors.
Earlier, Hyundai managed to slash the number of executives by 30 to 350, reducing promotions in its regular personnel shake-up last month. It had already undergone huge restructuring in its overseas branches by the end of 2008.
A Hyundai official said executive positions could be reduced to 300 by the end of this year.
``Uncertainty in global car markets has obviously led to the reshuffling,'' he said, predicting more readjustment could follow in the first half of this year. Worldwide vehicle sales might fall by at least 7.7 percent this year, according to a Hyundai forecast, as the U.S.-triggered economic slump is fast spreading into emerging markets.
Despite such difficult external factors, it is aiming for ambitious goals in overseas markets. Hyundai and Kia had planned to boost overseas capacity by about 30 percent by 2011, but decided to cut down on production due to sales declines overseas.
The company said the opening of new overseas plants will take place as scheduled ― Hyundai plans to open factories in Brazil and Russia after 2010, and Kia will open its first U.S. plant in Georgia in December. Its foreign investments plan will remain the same, it added.
Recent moves of the company show Hyundai and Kia's main focus is firmly set abroad even though production has slowed in most of their foreign factories.
In an attempt to appeal to customers, Hyundai has recently offered an assurance program by which buyers can return the vehicle to the company if they get fired from work or declare personal bankruptcy, without increasing loan fees.
Meanwhile, Kia President Chung Eui-sun left Monday for a week-long trip around the United States and South America.
In the United States, Chung, the only son of Hyundai-Kia Chairman Chung Mong-koo, will visit the site of the Georgia plant.
Kia initially planned to produce a new model to replace its Sorrento sports utility vehicles at the new facility, but changes in the plan have recently become inevitable with the rapidly shrinking demand for SUVs.
After the United States, Chung will be headed for Brazil and Chile on an encouragement mission for dealerships there.
Kia's sales in Latin America nearly doubled in only a couple years. It sold 42,299 vehicles there in 2005, but the figure soared to 81,691 in 2007.