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Hyundai Motor considering plant in Vietnam

Released at: 19:16, 11/01/2018

Hyundai Motor considering plant in Vietnam

Photo from doisongphapluat.vn

Vehicle giant looking at Vietnam and Indonesia in wake of problems in China.

by Quang Huy

Hyundai Motor has said it is considering building a car plant in Southeast Asia, with Indonesia and Vietnam being possible locations, as part of efforts to diversify after a sales slump in China, according to foreign newswire Reuters.

The automaker does not have a car manufacturing factory in the region, though it has some pure assembly operations in Indonesia and Vietnam where cars are made from completely-knocked-down (CKD) kits comprised of major component groups.

A diplomatic row between China and South Korea last year over South Korea’s planned deployment of the US’s anti-missile defense system, the Terminal High Altitude Area Defense (THAAD), hurt Hyundai and other South Korean firms that are highly reliant on the Chinese market.

Hyundai expects its China sales to reach about 900,000 vehicles in 2018, a recovery from low levels last year, Vice Chairman Mr. Chung Eui-sun said on the sidelines of a consumer electronics show in Las Vegas, according to a company spokeswoman.

Previously, South Korean media reported in November 2016 that Hyundai Motor had signed a memorandum of understanding (MoU) with the Hyundai Thanh Cong Auto Co., a joint venture between Hyundai and Vietnam’s Thanh Cong Auto Co., for the construction of a new CKD plant assembling auto components shipped from South Korea.

Located in northern Ninh Binh province, the new facility is set to be completed by 2018 and will primarily focus on assembling the Grand i10 compact hatchback. The automaker hopes to roll out 120,000 units initially and boost annual capacity to 240,000.

The deal is expected to provide jobs to 8,000 new workers in the region. Hyundai, however, has not disclosed the amount of investment.

While Vietnam’s auto market is relatively small in Southeast Asia it is growing at the fastest rate thanks to more people moving from motorcycles to motor cars. In 2015, 210,000 cars were sold in the country, according to the International Organization of Motor Vehicle Manufacturers, which was a substantial increase over 2014’s 134,000 units.

However, after a surprise increase to a 20-year high in 2016, car sales in Vietnam dropped 10 per cent year-on-year in 2017, to 272,750, according to the latest figures from the Vietnam Automobile Manufacturers’ Association (VAMA).

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