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Hyundai and Kia Increase Local Production Ratio in Europe
Local Production Bases
Hyundai and Kia Increase Local Production Ratio in Europe
  • By matthew
  • March 7, 2013, 17:24
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The Hyundai and Kia Group declared on March 5 (local time) at the 83rd Geneva International Motor Show that it would increase its local production ratio in Europe to 90% by next year. The idea is that it has no other option but local production to get over the so-called New Normal trend, which can be defined as the emergence of trade protectionism and restrictions amid the prevalence of low growth.

“We’ve invested two billion euros to establish production facilities in Europe and will make an additional investment of 475 million euros to expand the annual capacity of our plant in Turkey to 200,000 units,” said Hyundai Motor Europe COO Allan Rushforth on that day, adding, “We’ll boost our local supply capabilities by making use of the production bases.” Mark Hall, marketing director at Hyundai Motor Europe, echoed by saying, “We’ve released 15 new models design and manufactured in Europe since 2008 to be well received by a great number of consumers and our efforts will continue down the road.”

The Hyundai i30, for example, was developed by its R&D center located in Germany and has been manufactured in its Czech plant to become one of the final candidates for the Car of the Year Award in Europe. The compact SUV ix35, whose sales increased no less than 15% last year, is produced at the Czech plant, too. Kia’s European models like the Ceed also have been designed in Frankfurt, Germany and manufactured in the Slovakian factory.

The automakers are planning to step up their localized marketing efforts as well, particularly sports marketing. “Both Hyundai and Kia will continue with their support for the EUFA and Hyundai will join the World Rally Championships this year,” said Hyundai Motor vice chairman Chung Eui-sun. To this end, Hyundai has come up with its rally car for the WRC based on the i20 and built new motor sports facilities in Germany. The effect of marketing campaigns using soccer is expected to be maximized with the World Cup scheduled for next year in Brazil.

The companies are focusing their PR resources to publicize that they are making great contribution to the European economy, too. “Hyundai’s annual purchase in Europe amounts to 4.8 billion euros and 72% of it is through insourcing in the region,” the COO emphasized, “The company pays 0.9 billion euros of taxes each year and more than 47,000 locals are working for our company.”

The group is expecting that its business in Europe will be taken into another level through its efforts for localization. Hyundai Motor’s senior managing director Jo Won-hong, who is in charge of marketing, remarked at the venue, “European automakers are having hard time nowadays and it means an opportunity for us. We’ll be striving to win over more and more European consumers this year.”