Hyundai keen on building Czech plant
Hyundai Motor Co plans to build a 1 billion euro ($1.2 billion) plant in the Czech Republic to boost its presence in the European market.india Updated: Sep 30, 2005 12:54 IST
Hyundai Motor Co plans to build a 1 billion euro ($1.2 billion) plant in the Czech Republic to boost its presence in the European market, South Korea's biggest auto maker said on Friday.
Europe is the second-biggest overseas market for Hyundai, the world's seventh-largest carmaker, after the United States.
Hyundai, which controls half of the South Korean market, has been driving its overseas expansion in an effort to diversify markets and shift from higher labour costs at home.
"The Czech Republic is becoming an economic centre for middle Europe and is considered to be the ideal candidate cite," Hyundai Motor Chairman Chung Mong-Koo said in a statement.
Chung met top Czech officials on Thursday and discussed the issue. An agreement has not been signed yet.
The new plant will have an annual production capacity of 300,000 vehicles and Hyundai aims to start production in 2008, the company said.
Hyundai expects its 2005 sales to Europe to rise 23 per cent to 462,000 units.
It said the new plant would help the company cut transportation costs and losses from volatility in foreign exchange rates.
"We can also effectively cope with any trade dispute in the future," Hyundai said.
In Europe, Hyundai Motor has a production base in Turkey, while its affiliate Kia Motors Corp. Is set to begin production in Slovakia in 2006.
Hyundai Motor opened its first US Plant in Alabama in May. By 0212 GMT, shares in Hyundai Motor, the fifth-biggest stock on the Korea Exchange with a $17 billion market capitalisation, rose 0.49 per cent to 81,800 won, outperforming the wider market's 0.