Hyundai’s Nosovice factory in the Czech Republic is Europe’s newest car plant, and takes modular assembly to a new level, as Mark ‘Coolbear’ Bursa discovers.


Here we are at Europe’s newest car factory. And today, it feels like Europe’s coldest. It’s snowing in Nosovice. Hard. And it’ll continue doing so for a few weeks. Not that it bothers the staff at Hyundai Motor Manufacturing Czech – even in these conditions, factory-fresh cars are being tested on the plant’s test track, and snow-covered i30s are being loaded on to transporters. The plant has only been running for a couple of months, but it’ll take more than a snowfall – and more than a global recession – to stop it.


The weather may not have been the main appeal of this location, in an increasingly prosperous corner of Central Europe where three nations – Poland, Slovakia and the Czech Republic – intersect. But much of the recent expansion of European car manufacturing has happened here. There’s quite an automotive cluster within a couple of hundred kilometers – Fiat and GM to the north in Poland; VW and PSA to the south around Bratislava, Slovakia’s capital.


And here, on the Czech side of the Czech-Slovak border, is the second part of Hyundai Group’s European manufacturing strategy. The other, Kia’s plant at Zilinia, is about 90km further east, in Slovakia. The world economy was a lot healthier when Hyundai-Kia decided to localise production of its mainstream C-segment European models – but there are no regrets.


Far from it. Hyundai Motor Europe vice-president Allan Rushforth, is almost bullish: “Some companies will fare better than others in this recession – and we think we’re one of those that will.” He acknowledges that the industry is facing “exceptionally challenging times”, and won’t be drawn on sales projections for 2009, other than to target a 2% market share in the EU28 markets.

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Sales are likely to be down globally on Hyundai-Kia’s 4.17m sales in 2008, including 1m units built outside Korea for the first time as European and US plants kick in. But Rushforth says “the European market will be the most important for Hyundai over the next five years” – and the Czech and Slovak plants are central to that strategy.


The two plants are almost twins – not identical; Nosovice represents a slight upgrade in facilities, and incorporates lessons learned over at Zilinia. Not least of these modifications concerns how the plant copes with the weather. At Zilinia, the main module suppliers to the plant are located on site, but have to truck their components sets to the main line. At Nosovice, the two main module assemblers, Mobis and Daymos, are directly linked to the main assembly line by overhead bridges, so not a single snowflake falls on the finished sub-assemblies as they are transported by conveyor directly to the point at the line they are needed, in sequence.


The ‘modularity’ of the plant accounts for its efficiency. There are only three main modular assembly suppliers on-site – Mobis, Daymos and Hysco. But between them, they build seven modules – a front-end module, integrating radiator, headlamps and bumper; cockpitmodule, with dashboard and steering wheel; door interior; roof headliner; rear suspension; exhaust; and front suspension – a complexmodule that also incorporates the engine.


So a large proportion of each car is assembled off-site, with the suppliers managing the supply chain for the parts that go into the modules – including the engines, which come from either Zilinia or other Hyundai plants. Effectively, Hyundai is a Tier 2 supplier of engines to itself.


This is the sort of modular logic that has been talked of since the days of Jose Ignacio Lopez at GM and VW – but it’s rare to see it in action on such a scale. But you can see the impact on productivity – just 616 people operate the main assembly hall at Nosovice on a single-shift basis. Zilinia is similar, of course, with around 42 percent of the components arriving as modules. But the degree of integration is higher at Nosovice – there are fewer, bigger modules.


By the time Nosovice is running flat out – around 2011, by which time it will be making four models – it will employ 3,500 workers. Hyundai has spent more than EUR1 billion – including EUR150m in local grants. The plant was built in remarkable time. Production started in November 2008 – just 19 months after the ground-breaking ceremony on the greenfield site.


What helped this rapid turnaround was the experience of Zilinia. The two plants are built to a very similar blueprint, though there are subtle differences, notably in the layout of the plants. The Nosovice line is smaller than Zilinia, partly due to advances in automation technologies – newer robots, for example, which occupy less floorspace. And partly doe to a more efficient workflow in the assembly hall, with fewer, longer lines.


A strategic approach has meant the Nosovice site is equipped slightly differently to Zilinia. Nosovice makes gearboxes, and there is sufficient land to double the size of this facility. This is necessary because Zilinia does not make transmissions – so Nosovice will supply it.


But Nosovice doesn’t have an engine facility – which is a major part of Zilinia. So there is a cross-flow of components between the plants – engines one way, gearboxes the other. The two plants do not exclusively supply each other –smaller 1.2-litre gasoline engines come instead from Hyundai’s massive manufacturing facility at Chennai in India.


This marks something of a change in strategy. Hyundai and Kia have traditionally maintained separate manufacturing networks, unlike, say PSA, which has integrated Peugeot and Citroen manufacturing into a platform-based single unit, where ‘PSA’ plants build for both brands. In fact, we’re already seeing a shift down this road at Hyundai-Kia. Already the Hyundai Tucson compact SUV is built at Zilinia – it is mechanically very similar to the Kia Sportage.


And Nosovice will be building a Kia model before the year-end. The assembly line is capable ultimately of assembling up to eight different bodystyles, though currently only the five-door hatchback Hyundai i30 compact is built. A station wagon version will be added any day now, followed by two B-segment MPV models, one for Hyundai and one for Kia.


The Kia model, codenamed YN, will be launched in November 2009. It will closely resemble the B-segment MPV concept car that will be unveiled at the Geneva Motor Show next week. A Hyundai version will follow in early 2011. This is codenamed JC, and has different styling, but the same platform and running gear. By then, the plant will be close to its designed capacity of 300,000 units – which equates to 66 cars per hour. In return, the new Hyundai compact SUV – unveiled as a concept car called ix-onic during our visit – is to be built at the Kia Zilinia plant, as it shares considerable component content with the next-generation Kia Sportage. It’s likely to be called Hyundai ix35.


A tour of Nosovice does have elements of déjà vu – I visited Zilinia last year – read my report here. The bodyshop is eerily similar –eerie as it’s almost completely deserted – it’s almost fully automated, and populated only by busy yellow Hyundai robots. There is only one manual welding station, and that’ll probably be automated before long.


A feature is the complex robotized main buck welding station, which carries out the main welding of floorpan, roof rails, front cowl and body sides. This is the most important station on the welding line, where the main body structure is added to the completed floorpan. There are 48 weld points in a single station. Plant workers have named the station “Jurassic Park”, as the movements of the group of robots at the station resembles a family of dinosaurs!


From the welding line, the bodies are transferred via an overhead bridge to the paint shop, which is one of the cleanest and most modern in Europe – in a recent survey, it was ranked third most efficient, behind two BMW operations. Doors are painted separately but remain in sequence – a separate door assembly line is situated in the main assembly hall, where door interior modules and glass are fitted, before the doors are reunited with the main body shell later on the assembly line.


The final assembly line is less robotised – this is where a large proportion of the 2,000 workers are employed. Factory workers earn around EUR900 per month – a lot less than in Western Europe.


On the assembly line, bodies initially travel on an overhead conveyor, until they reach the chassis marriage station, where the main under-car modules – front-end; front suspension/engine/transmission; exhaust system and rear suspension, are fitted. These arrive on height-adjustable skillets, and move into place on an automated ‘loop’, which positions them directly below the bodyshell. The skillet then raises the modules up to ‘marry’ with the body shell, and workers manually fasten the modules to the body.


Again, the similarities with Zilinia are marked – when I visited the Kia plant last year, there were several groups of Hyundai workers on the line, being trained for their future jobs. They must have found it reassuringly easy!


From there, the bodies are transferred from the overhead conveyor to a floor-mounted skillet line, which allows interior, trim, glazing, wheels and finally doors to be fitted. This line takes cars directly to a testing and inspection facility, where minor blemishes can be rectified and where each car’s systems are tested. And from there’ it’s out into the snow for track testing and outbound transport, whether by road or rail – like Zilinia, the plant has direct rail connections, together with easy access to motorways.


Mark ‘Coolbear’ Bursa


See also: EMERGING MARKETS ANALYSIS: Zilinia – Kia’s model of manufacturing efficiency