Hyundai Motor has started the construction of its new Russian assembly plant.
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The groundbreaking ceremony drew about 500 participants, including Presidential Plenipotentiary Envoy to the Northwest Federal District of Russia Ilya Iosifovich Klebanov, St. Petersburg Governor Valentina Matviyenko and Hyundai Motor’s vice chairman Suh Byung-kee.
“Hyundai Motor’s new Russian plant — our sixth overseas production base — will play a central role in Hyundai’s expansion in the Commonwealth of Independent States nations and Eastern Europe,” Suh said at the ceremony.
“We will produce products of the highest quality to become Russia’s top automaker.”
The plant is scheduled to begin operations in December 2010 and start production for sales in January 2011.
The Korea Herald newspaper reported that the plant will initially produce 60,000 units of a new model designed specifically for the Russian market on an annual basis and production is planned to be pushed up to the plant’s maximum production capacity of 100,000 units from the second half of 2011.
The report added that the Russian government has agreed to apply lower tariffs to imported parts used at the plant from 2011 to 2018.
With the lower tariffs placed on imported parts, taxes placed on cars produced at the new plant will be as much as 10% lower than those assembled at the company’s CKD plant in the country, the report said.
Located in Taganrog, 860 kilometres south of Moscow, Hyundai Motor’s CKD plant was established in 2001. The CKD plant is capable of assembling 180,000 units of passenger cars and small commercial vehicles and 140,000 commercial vehicles on an annual basis.
Hyundai Motor’s success in the booming Russian market has caused some models to run into supply difficulties. Some of the more popular models need one month to be delivered and if special optional features are included the waiting period can be as long as three months.
