Hyundai has officially opened its new Czech Republic car and components plant despite the global financial crisis forcing production cuts across the car industry.


Czech industry and trade minister Martin Riman said in his speech that “the time Hyundai officials have chosen to start production is not exactly ideal,” but the officials were quick to brush off concerns about the global downturn, Agence France-Press (AFP) reported.


“The crisis is not an issue here. We have just started,” Hyundai Motor Manufacturing Czech (HMMC) spokesman Petr Vanek told AFP after the ribbon-cutting ceremony.


Built on land once used largely to grow cabbages near the Czech border with Poland and Slovakia, the EUR1.1bn ($US1.45bn) plant last week began making i30s, mechanically similar to the Ceed line produced in affiliate Kia’s plant in Slovakia. The new Hyundai plant will supply Kia’s with gearboxes.


HMMC president Kim Eokjo told AFP the company would weather the crisis by focusing on small cars, and because of the cost-saving technological quality of its facility. “I believe our sales will grow,” he added.


Last week, Hyundai said its US factory in Alabama producing Sonata sedans and Santa Fe SUVs would reduce production this year and be idle for 11 days.


In stark contrast, the new Czech plant is planning to raise workforce from the current 1,800 staff to 2,200 by the end of the year and to 3,400 by 2011.


HMMC president Kim admitted the Czech plant did not have secured contracts for the 185,000 cars it expects to turn out in 2009, against a capacity of 200,000 units, but he added this was not an issue on a global scale with the plant making 5% of the automaker’s output.


A local news agency said Hyundai has confirmed orders for 14,000 units for 2008, lower than the initially expected 18,000.


Global Hyundai sales rose 12% last month to 269,958 units, the best monthly figure ever, owing to demand for smaller cars. Sales of cars produced outside South Korea increased 27%.


Vanek told AFP the plant’s recruitment centre receives 20 applications for jobs a day, mostly from people sacked by local steelworks which are laying off staff because of the global downturn.