November 22, 2024

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[THE INVESTOR] Hyundai Motor is mulling a new assembly plant in Vietnam to beef up production in one of the fastest growing economies in the world, according to news reports on Nov. 22.

The carmaker recently signed a memorandum of understanding with Hyundai Thanh Cong Auto Co., a joint venture between Hyundai and Vietnam’s Thanh Cong Auto Company -- for the construction of a new complete knockdown plant that assembles auto components shipped from South Korea, the reports note.

 

The new facility will be built in the city of Ninh Binh, northern Vietnam, with plans to be completed by 2018. The plant will mainly focus on assembling compact hatchback Grand i10. The automaker hopes to roll out 120,000 units initially and boost the annual capacity to 240,000 units.

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

While Vietnam’s auto market is relatively small in the Southeast Asian region, the market is growing at the fastest rate, thanks to more people moving from motorcycles to cars as a mode of transport. In 2015, a total of 210,000 cars were sold in the country, according to the International Organization of Motor Vehicle Manufacturers. The figure nearly doubled from 134,000 units in 2014.

Hyundai, by focusing on compact cars in the market, is enjoying growing popularity. The automaker and its smaller affiliate Kia Motors became the top automobile sellers in the country for the first time last year, making up a combined 29.8 percent of the auto market. It exceeded the former market leader Toyota, which had a market share of 24.1 percent.

By Ahn Sung-mi (sahn@heraldcorp.com)