UK: Koreans add value to European economy
By Chris Wright | 27 February 2013
The South Korean Hyundai and Kia brands are the fastest growing in Europe but the full impact of their success in the region is revealed in an economic impact study carried out by London Economics, one of Europe's leading specialist economics and policy consultancies.
It reveals that 253,000 people owe their jobs to the presence of the Korean carmakers and, including customs duties, sales and income taxes, they contribute almost EUR1.7 bn (US$2.2bn) in revenue to European governments.
With factories in the Czech Republic and Slovakia, Hyundai and Kia purchase supplies worth EUR3.4bn (US$4.4bn)from European businesses.
Despite plummeting sales in Europe, the South Korean car companies grew their sales in the region. Hyundai was up 9.4% and Kia grew 15.% over 2011 while the market overall fell by nearly 8%.
Success has been driven by significant investments and some attractive cars. As well as the factories in eastern Europe, design, R&D and sales and marketing headquarters are in Germany.
Hyundai opened its plant in Nošovice, Czech Republic which has an annual production capacity of 300,000 units, in 2008, following a spend of over EUR1bn (US$1.3bn). Kia’s Žilina plant in Slovakia was completed in 2007.
Investment by the Koreans has been instrumental in making the Czech Republic and Slovakia the world's top two producers of cars per capita and 55% of Hyundai and Kia cars sold in the EU are produced in the two plants.
As well as the existing facilities, construction of a new vehicle test centre at the Nürburgring race track in Germany was announced in January with a further spend of EUR5.5m (US$7.2m).
Allan Rushforth, vice president and chief operating officer at Hyundai Motor Europe, said: “We’ve built a business that can grow sustainably, bringing benefits to the European economy and to all those associated with Hyundai.
“In 2013 we aim to consolidate our position and strengthen the fundamentals of our business through qualitative growth – enhancing Hyundai’s brand image, increasing customer satisfaction and maintaining our 3.5% market share.
“We consider Hyundai to be a committed European carmaker, here for the long term. It’s a region of strategic importance for Hyundai that will see further investment and focus.”
Sectors: Emerging markets, Vehicle manufacturers, Vehicle manufacturing, Vehicle markets
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