Korean news agency Yonhap, citing an unnamed ‘high ranking executive’ has reported that Hyundai-Kia will build a manufacturing plant in Brazil with initial capacity of 100,000 units a year.
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Separately, news agency AFP quoted the group’s global vice president, Kim Dong-Jin, as saying the Brazilian unit would fit into the automaker’s strategy of increasing production outside South Korea, south-east Asia included.
“Our goal is to produce 3m units domestically and abroad by 2010”, AFP quoted Kim as saying.
Here in Brazil, business paper Gazeta Mercantil – citing Carlos Alberto Oliveira Andrade at local Hyundai-Kia importer/assembler Grupo Caoa – reported the total investment would exceed $US1bn.
With that sort of spending, the proposed Brazilian plant would eventually have capacity for 300,000 units a year.
If the plant does get the green light, it is likely to be built with foreign capital and to assemble Kia models initially.
Group Caoa, with local capital, last year opened a factory in Anápolis, State of Goiás, to assemble the Hyundai HR light truck and, from mid-year, will add the Tucson.
This small SUV was the most popular foreign nameplate sold here last year among imported fully-assembled models not exempt from import duty (which applies only to vehicles from Argentina and Mexico).
Hyundai-Caoa recently requested affiliation with Anfavea (the local automakers’ association) and its membership was approved late last year.
Following the ending of federal government restrictions back in 1996, any automaker can establish facilities in Brazil and assemble vehicles with unrestricted local content.
Only when exporting to Mercosur countries (all in South America) must automakers reach a minimum of 60% local content (this can include labour) using components purchased within the economic bloc.
Most automakers operating in Brazil, including newcomers, have since achieved local content over 60% – in many cases, it is over 90%.
Currently 16 makes of cars and light commercials (including just one Brazilian brand: Agrale) are produced here.
Fernando Calmon
