Hyundai Begins Construction on Russian Plant

St. Petersburg plant to be Hyundai´s gateway to CIS and Eastern Europe

– Hyundai will build a 100,000 units-a-year factory in St. Petersburg
– Plant to be completed by Jan 2011, investment to reach 330 mln euros
– Plant will produce new, small to mid-size models for Russian market;
raise corporate image through ´Made in Russia´ products

St. Petersburg, Russia -- Hyundai Motor Company, South Korea´s largest automaker, began construction of its 100,000 units-a-year plant in St. Petersburg to establish a local production and sales base in Russia, which will be a stepping stone to expansion in the CIS and Eastern Europe.

Mr. Ilya Iosifovich Klebanov, Presidential Plenipotentiary Envoy to the Northwest Federal District of Russia; Ms. Valentina Matviyenko, governor of St. Petersburg; South Korea´s Ambassador to Russia and about 500 other Russian government officials, executives and employees of Hyundai Motor and its parts suppliers, as well as local dealers and media members attended the plant groundbreaking ceremony of Hyundai Motor Manufacturing RUS at Kamenka, St. Petersburg today. (**Please note that the attendee list for the Russian government officials may change due to last minute schedule changes)

Hyundai Motor plans to invest a total of 330 million euros in the plant, which will begin operations in December 2010 and begin production for sales in January 2011. Production is expected to reach maximum capacity of 100,000 units a year by the end of that year.

For the first year of 2011, Hyundai Motor plans to make new, small- to mid-size models strategically targeting the local market. Other models will be added according to local market conditions.

"Hyundai Motor´s new Russian plant, our sixth overseas production base, will strategically play a central role in Hyundai´s expansion in the CIS nations and Eastern Europe," Byung-kee Suh, Hyundai Motor´s Vice Chairman of Quality Assurance said at the ceremony. "We will produce the best products to become Russia´s No. 1 automaker."

St. Petersburg is the perfect area for the automobile industry to prosper, as it is blessed with a well-developed industrial infrastructure and logistics, highly-educated workforce, and the government´s active support. Together with Turkey and the Czech Republic, the new plant will be an advance base for Hyundai Motor´s operations in Europe. It will also be an important production base that completes Hyundai´s global expansion plans.

The plant, which will include storage facilities and a shipping area, will be built on an area of about 2 million square meters. The actual area of the buildings and facilities will take up about 83,000 square meters.

The Russian plant will get the full benefit of Hyundai Motor´s accumulated knowledge and experience gained from building plants in other emerging markets such as India, China and the Czech Republic. This will ensure the plant´s critical start-up phase will proceed smoothly in all areas of operation from manufacturing to administration and community relations.

Hyundai will actively support its parts suppliers to work together in the new plant, to secure high-quality parts and also give its parts suppliers an opportunity to expand its business. Hyundai Motor also expects to create about 4,000 jobs, including 1,700 for its assembly lines and about 2,200 for its parts suppliers.

Through the new plant, Hyundai Motor will be able to respond more flexibly to the local market by shortening delivery dates. This is also anticipated to save storage costs and improve dealers´ satisfaction.

In the long term, Hyundai Motor will be able to boost its brand value and customer reliability by promoting a corporate image of ´Made in Russia,´ laying the foundation for sustainable development in Russia.

Hyundai Motor expects to reach a broader range of customers with a full line-up through its added capacity from the new plant, which will add to the vehicles currently imported from Korea and the vehicles produced from its existing CKD plant.

Separately, Hyundai Motor last year sold 147,843 passenger cars in Russia, a 47 percent increase from 2006, ranking No. 2 in Russia´s imported brands. This year, Hyundai Motor expects sales to increase 35 percent from last year, to about 200,000 units. The company plans to achieve this through aggressive marketing and promotion activities to boost brand image, as well as expanding dealerships and continuously introducing new models.

In the commercial vehicle sector, Hyundai Motor also posted an annual sales increase of 60 percent to 8,014 units last year. The company plans to double this figure in 2008, to 16,700 units.

[Source : Hyundai Motor]