Shifting to Overdrive
South Korea’s Hyundai Motor is stepping up its globalization campaign. In late June it revealed joint-venture plans with China’s Guangzhou Motor Group to produce trucks and buses in China. The two partners will build a plant in the port city of Huadu, Guangdong province. The initial annual production capacity of 20,000 units in 2007 will be expanded to 200,000 by 2011, with a total investment of $1.24 billion.
“This commercial vehicle joint venture is critical to reach our goal of producing 1 million cars in China by 2008,” says Hyundai’s chairman and CEO, Chung Mong-Koo.
China’s bus market is seven times larger than South Korea’s, but its light and medium-duty truck market is 100 times larger than South Korea’s. Hyundai already has a joint venture with Beijing Industry Automotive Holdings, which was established in 2002.
These are busy times for Hyundai, which in May opened its first US car plant—a $1.1 billion complex near Montgomery, Alabama, capable of producing 300,000 vehicles annually. In addition, Hyundai is building a second assembly plant in India, adjacent to its existing facility in the southeastern port city of Chennai. When completed by 2007, Hyundai’s manufacturing capacity at Chennai will reach 400,000 units. It not only will serve the fast-growing Indian car market but will export to Europe, Latin America and the Middle East.
Hyundai employs more than 68,000 people worldwide and posted $26.1 billion in sales in 2004. Its vehicles are sold in 193 countries.