Hyundai to Assemble Vehicles in Brazil

Posted 20 February 2007 @ 11:37 am EET     Print     Reprint     E-Mail     Comments

SEOUL, South Korea (AP) - Hyundai Motor Co., the world's sixth-largest automaker, said Tuesday it plans to export vehicle parts and components to be assembled at a locally owned plant in Brazil.

Caoa Montadora, based in Sao Paulo, will import parts and components for assembly on what is known as a complete knockdown, or CKD, basis, Jang said. The plant, to be located in the Brazilian state of Goias, will assemble 50,000 pickup trucks and sport utility vehicles a year, Jang said. "Brazil is a big market in Latin America," Jang said. "The customs duties of imported vehicles are high, about 35 percent."

Jang said that Hyundai will not bear any of the investment costs for the plant, but will dispatch some Hyundai personnel to help oversee production. Hyundai, which runs full-fledged factories in China, India, Turkey and the United States, also has CKD arrangements in 13 countries including Russia, China, Iran, Venezuela, Egypt, Vietnam and Sudan. Hyundai affiliate Kia Motors Corp. has full-fledged factories in China and Slovakia and knockdown arrangements in Russia, Vietnam, Indonesia, Malaysia, Iran and Ecuador.

CKD-manufactured vehicles are a relatively small component of Hyundai's total sales. The company last year sold 160,000 of those vehicles, compared with 2.52 million manufactured at its regular factories. Kia sold about 1.35 million vehicles worldwide last year. Kia did not have an immediate breakdown on knockdown sales, but Kia spokesman Michael Choo said the total capacity at its knockdown plants was 209,000 vehicles. Hyundai, along with Kia, is expanding aggressively overseas. Hyundai has plans for a factory in the Czech Republic. Kia has a second China factory due to come on line later this year and is also building a plant in the United States. Hyundai Motor shares rose 1.4 percent Tuesday to close at 72,600 won ($77). Kia gained 3.5 percent to 13,250 won ($14).