Hyundai to build Car Plant in Russia

Recently, Hyundai Motor Co.’s plan to build a $400 million car manufacturing plant in Russia has been revealed. The construction is set to start in 2008.

According to the statement from The Leningard region local government citing Hyundai’s General Manager Chan Joo Cho, the plant will be having the capacity to produce 100,000 to 200,000 units annually. Government spokesman Alexander Butenin has mentioned that the site for the factory will be finalized before the end of this year and the construction is likely to begin in 2008.

Last month, a Hyundai official said that the company was in the process of choosing a final site for the plant. For now, the company has not yet given any comment regarding the details.

At present, Hyundai, the world’s sixth largest automaker along side with its affiliate Kia Motor Corp., is already assembling about 70,000 to 80,000 cars each year in Russia at its Taganrog car plant in southern Russia.

The local government said that the company needs another $300 million worth of investment to establish a number of plants to produce car parts within approximately 60 to 100 hectares around the main factory. There were 20 Korean producers of car parts, according to Butenin, are planning to launch production in Russia. The cluster includes Dymos Inc., Daewan San Up Co., Dongwon Metal, Glovis Co., Tong Hae Electrics Industries, Mando Corporation and Sewon Ecs Co.

The government is expecting those projects to create 7,000 jobs.

Currently, Hyundai is a top-five foreign car brand in Russia. The market is where rapid economic growth and increasing consumer lending boost the demand for new imported vehicles.

In the first ten months of this year, Hyundai was able to have 112,174 cars sold in Russia. Based from the Association of European Business in the Russian Federation, the number shows 44 percent improvement compared from the company’s sales a year ago.

That is a significant progress that would mean further growth in the upcoming months, adding up with the company’s expansion through establishing new plants.