By Ryu Jin
Staff Reporter
Hyundai Motor, the largest South Korean automaker, plans to build its first factory in Russia to compete with General Motors (GM) and Ford and satisfy the growing Russian appetite for foreign cars, according to company officials Sunday.
Hyundai-Kia Automotive Group Chairman Chung Mong-koo told Russia’s Minister of Economic Development & Trade Nabiullina Elvira Sahipzadovna that his group plans to build a factory with an annual production capacity of 100,000 units.
Chung made a trip to Moscow from Wednesday to Saturday to inspect his group’s business activities and to ask for support from the country for South Korea’s efforts to host the 2012 World Expo in its southern port city of Yeosu.
``He asked for the Russian government’s support and cooperation for the construction of the factory when he met with the Russian minister and other officials last Friday,’’ a group spokesman said.
Hyundai Motor has so far admitted that it has been considering a production base in Russia for finished products. But it is the first time that the group chairman has confirmed the plan in a meeting with Russian officials.
If realized, the envisioned Russian factory would be Hyundai Motor’s sixth production line in foreign territory, following one under construction in the Czech Republic as well as factories operated in the United States (Alabama), China, India and Turkey.
Hyundai Motor has a long-term plan to increase annual overseas production to two million vehicles including 600,000 each in China and India, 300,000 each in the U.S. and the Czech Republic and 100,000 each in Turkey and Russia.
Company officials, however, said that details for the plan such as the site, investment scale and time schedule are yet to be fixed. Some sources said that the proposed factory is likely to be built in either St. Petersburg or Nizhegorod Province from early next year.
Hyundai Motor’s sales in Russia nearly doubled in October year on year thanks to strengthened marketing activities and a smoother supply of vehicles. It said that it sold 16,489 vehicles in Russia last month, up 92 percent from a year earlier.
According to a report released by the European Business Association’s car manufacturers committee, foreign car sales in Russia, including those produced locally for foreign brands, soared 63 percent to 1.137 million in the first three quarters of this year.
But the South Korean carmaker, which had previously been the No. 1 foreign car seller in Russia, has been facing a tough battle against GM and Ford since last year. The committee estimated that Hyundai Motor sold 80,500 during the nine-month period.
Hyundai Motor forms the world’s sixth-largest automotive group together with its affiliate Kia Motors. Hyundai-Kia Automotive Group aims to be one of the world’s top five automakers by 2010.