Last year, South Korean automakers Hyundai and Kia, represented locally by two Brazilian groups (CAOA and Gandini, respectively) imported 138,000 vehicles, second in Latin America only to Argentina, which has an auto industry well integrated with Brazil’s, and twice Mexico’s volume.
But Hyundai’s ambitions are bigger than that. This became clear during the cornerstone-laying ceremony of the first wholly-owned Brazilian assembly plant in Piracicaba, 95 miles northwest of state capital São Paulo. The first units are due off the line in the second half of 2012.
“Without our own plant here, we have conquered 3% of the Brazilian market in 2010. With 150,000-unit, full capacity in 2013, complemented by over 100,000 imported units and by another 50,000 units produced by our partner CAOA, we are likely to reach 10% market share, overtaking Ford,” said Han Chang Hwan, Hyundai Motor’s senior vice-president for the Americas, to journalists gathered at the construction site.
This prediction is quite optimistic as Ford sold almost 340,000 cars and light commercials in Brazil last year and is expanding the capacity of its main plant, in Camaçari, Bahia state, by 20%.
Hyundai is directly investing US$600m in the new plant and another $300m will be kicked in by the eight autoparts manufacturers to be located alongside.
He would not reveal details of the compact car to be launched at the plant but Hwan insisted it would be competitively priced. Earlier leaked information said it was an automobile on the same platform as the i20 but redesigned and simplified to reduce costs.
Hyundai’s growth in Brazil has followed in the wake of ‘millionaire’ advertising campaigns.
Last year it ranked first in advertising spend among all automakers with circa $800m at regular rates, according to media survey company Ibope Monitor.
Though discounts are usual, at ratebook, Hyundai spent $7,500 per unit sold compared with GM’s $600. There is speculation parent Hyundai Motor may have helped CAOA Group with this cost.
Last week, entrepreneur Carlos Andrade said his CAOA will spend $360m this year to enlarge its plant in Anápolis, 88 miles southwest of the nation’s capital Brasília.
Yearly production will jump from 54,000 to 84,000 units, but no timeframe was specified.
Production of the i35 car and HD78 Mighty light truck powered by a 153bhp FPT engine are planned while the old Tucson and HR light truck will remain in production.
Hyundai currently has currently nine manufacturing plants: China, Russia, India, Turkey, Czech Republic and USA, including South Korea’s three.