Hyundai Motor opens first plant in Russia

By Kim Da-ye

St. Petersburg, Russia - Hyundai-Kia Automotive Group Chairman Chung Mong-koo and Russian Prime Minister Vladimir Putin walked onto the stage Tuesday specially set up in a newly built car plant in St. Petersburg. They grabbed the sticks made to resemble automobile shifts, made eye contact, and pulled them at the same time.

Fog filled the stage, and a bright red subcompact sedan Solaris triumphantly appeared. Putin took the handle with Chung sitting next to him and smoothly drove around inside the plant. Finishing the test drive, Chung and Putin signed on the hood of the car, ending the “Grand Opening Ceremony” for Hyundai Motor Manufacturing Rus (HMMR), the auto giant’s first car plant in Russia.

In the ceremony, Korea’s largest carmaker announced it became the first foreign company to build a full-cycle production facility in Russia, on which it spent $500 million (580 billion won). The plant targets producing 105,000 vehicles in 2011 and 150,000 per year from 2012.

“Hyundai Motor plans to create 5,300 jobs by 2012 in St. Petersburg together with 11 parts suppliers from Korea and, furthermore, contribute to the advancement of Russia’s automotive industry by developing and supporting local automotive parts manufacturers,” Chung announced at the ceremony.

HMMR was first planned when an investment agreement was reached between Hyundai Motor and Russia’s Ministry of Economic Development. On June 5 the auto giant held a groundbreaking ceremony in Kamenka, St. Petersburg.

“We had a groundbreaking ceremony two years ago here in St. Petersburg. Today we are celebrating the opening of the plant,” said Putin in his congratulatory speech. “Importantly, Hyundai Motor did not give up this project during the financial crisis, kept the promise with us and came this far.”

The 100,000-square-meter plant has four main shops ― for stamping, welding, painting and assembly ― and a test track at which each manufactured car undergoes a series of road tests. “Presence of the own stamping shop will allow the plant to maintain a high quality level of the stamped panels, better control the net cost and promptly switch to manufacturing of new car models,” said the automaker in a statement.

The automation ratio in the welding shop is now estimated at more than 50 percent, which Hyundai hopes to raise up to 80 percent in the near future.

Some 70 percent of the facilities were brought from Korea, Hyundai Motor said, while 11 Korean part suppliers ― including Hyundai MOBIS _ are situated near the plant, helping Hyundai save in logistics costs.

HMMR will produce from January next year the four-door subcompact sedan Solaris that known as its codename RBr, tailored for the Russian weather, road conditions and driving habits.

Solaris is equipped with a 60Ah battery for higher cold start performance, wiper deicer, front seat warmers and heated outside mirrors. It also comes with long-lifespan lamps because Russian drivers tend to drive with lights on even during the day time.

The subcompact sedan shares a similar size with Hyundai’s Verna and looks like the newly released Avante MD with its eagle-eye looking two-tone bezel headlamps and hexagonal front grille. The “Fluidic Sculpture” design is seen now seen in many Hyundai Motor models including the Sonata.

In the next year, Hyundai Motor said, it will unveil a five-door hatchback model of Solaris.

HMMR is the auto giant’s sixth foreign plant ― other plants are located in the U.S., China, India, Turkey and the Czech Republic. With HMMR, Hyundai Motor is capable of producing a total of 2.05 million vehicles a year.

The opening ceremony was attended by at least 600 Hyundai employees, government officials, corporate executives, journalists from both Russia and Korea including Korea’s Strategy and Finance Minister Yoon Jeung-hyun, Korean Ambassador to Russia Lee Youn-ho, Russia’s Industry and Trade Minister Victor Khristenko and St. Petersburg’s governor Valentina Matvienko.