Hyundai Starts Up St. Petersburg Car Assembly Plant

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Sept. 27 – Hyundai Motor launched its first Russian full-cycle car assembly plant in St. Petersburg. The company invested a total of US$500 million in the facility, which will work in pilot mode until the end of this year and start commercial production in January.

Production at the plant will include stamping, welding, painting and assembling.

The plant will manufacture 105,000 new C-class Solaris powered by a Gamma 1.4L or 1.6L engine next year, a subcompact car created specially for the Russian market. Production of the four-door sedan will start in January 2011, while manufacturing of the five-door hatchback is scheduled for May 2011.

Hyundai anticipates increasing an annual capacity to 150,000 units in 2012 as the plant will introduce three working shifts.

Prime Minister Vladimir Putin, who took part in the opening ceremony, said the enterprise would generate more than US$965 million annually in tax revenue in the coming years, adding that the opening was a heartening event for Russian motorists.

“This is the opening of a high-tech, world-renowned enterprise with the highest quality standards, which will manufacture cars specially designed for the Russian market,” he said.

Putin thanked Hyundai officials, who started building the plant in June 2008 “in the full swing of the financial crisis.”

The company also plans to expand the model range depending on demand and growth of the Russian market, said Kim Syn-thaek, head of the foreign business division at Hyundai Motor Manufacturing Rus.

The company expects to sell 75,000 vehicles in Russia this year. It already sold 47,200 cars in the first eight months, up 22 percent from a year ago and outperforming the market’s 14 percent growth.

The company hopes to produce the vehicles at low cost, largely through its cooperation with 11 South Korean auto-parts suppliers that have built facilities in St. Petersburg and in the Northwest Federal District in the past two years.

The St. Petersburg plant is Hyundai’s sixth production facility outside of its home market of South Korea. Other facilities are located in the United States, China, India, Turkey and the Czech Republic.

“Hyundai Motor Company plans to create 5,300 jobs by 2012 in St. Petersburg together with eleven parts suppliers from Korea and, furthermore, contribute to the advancement of Russia’s automotive industry by developing and supporting local automotive parts manufacturers,” commented Hyundai Motor Group chairman Chung Mong-Koo.

The area around St. Petersburg has already attracted investment from a number of foreign carmakers.

Most recently, Nissan opened a plant producing X-Trail SUVs and the Teana sedan in June 2009. General Motors has made its Opel Astra, Opel Antara, Chevrolet Cruze and Chevrolet Captiva models at a factory that opened in 2008, while Toyota has been manufacturing its Camry in the region since 2007.

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