The inauguration of the plant late in April was even attended by President Lula da Silva and an entourage of politicians but doubts remain about the real depth of the project that saw Hyundai become the 15th foreign automaker to make cars and light commercials here.
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Group Caoa, Brazil’s biggest Ford dealer group, is sole initial investor of up to $200m. Production is forecast at 130,000 units yearly by 2010.
The Korean group will provide the technology and receive royalties. Hyundai world president Choi Joe Kooe was present at the factory inauguration and announced that the Brazilian unit has Korean headquarters’ support to supply Latin America countries and possibly India.
He said the plan is to offer six different models – one more than planned – all manufactured in the new plant in Anápolis, state of Goiás, 150 km from the Brazilian capital Brasília, in the mid-west. In this same state, in Catalão, is the Mitsubishi plant owned by Brazilian group Souza Ramos.
Carlos Alberto de Oliveira Andrade, 63, Caoa’s president, negotiated financial incentives with other cities, but chose Anápolis finally. This is the last project to benefit from the attractive incentives of a federal programme dating from 1995.
However, Hyundai could not directly participate due to a debt of over $200m due by Asia Motors, Kia’s subsidiary, dating from 1998. Before it went bust in South Korea, Asia signed a deal with a Brazilian partner to build a plant in the state of Bahia. Incentives were granted but no building took place at all. The Brazilian government has subsequently regarded Hyundai as Kia-Asia’s successor and continues to claim the unpaid taxes related to the earlier deal.
In addition, this newest Brazilian auto manufacturing facility, with 80,000 sq m built in this first stage, was inaugurated well past deadline and is yet to be completed. The first product is the 1,800kg HR light truck with only 20% local content, though it is supposed to reach 60% minimum in two years. Direct employees for this 6,000 units/year phase number 500.
Caoa said it would start production of a second model by the end of the year with the Tucson or Santa Fe SUVs most likely. Fully imported from Korea, the Tucson has been a hit here due to very competitive pricing, even when burdened with a 35% import tariff.
The third model would be the Elantra sedan and it has been rumoured the Accent compact is also in the plans. Total planned investment is $600m in four years.
Fernando Calmon
