Hyundai Motor will delay choosing a site for a new European plant until after mid-March while its chairman visits candidate countries Slovakia and Poland, a source close to the deal told Reuters which noted that South Korea’s biggest carmaker had planned to announce the winning candidate for the €1.1 billion ($US1.40 billion) facility around the end of this month.
“It’s crucial to ascertain how seriously determined each candidate country is to give full support for Hyundai’s plan,” the source reportedly said by telephone.
“The chairman will also look around consumer markets there, visit local parts suppliers and see how the infrastructures, including railways, are set up,” he told Reuters, referring to a trip chairman Chung Mong-koo will take in mid-March.
The report said officials from Hyundai Motor and affiliate Kia Motors, who returned home last week after wrapping up talks with governments of the two countries, are examining proposals.
The nations – both due to join the European Union in May – are the only two left in the running for the factory, which would significantly boost its host country’s economy, Reuters said.
For now, Slovakia has an edge in cost terms, but it has a small population and there was a risk costs could rise as major global businesses make a foray into the former Soviet-style economy, company officials and other sources have told Reuters.
“Hyundai is weighing not just questions of incentives and localisation, where the two countries’ offers look quite similar, but also elements of long-term strategy,” Andrzej Szejna, deputy head of Poland’s investment agency, told Reuters.
“The company is looking at conditions including potential for economic growth, stability of labour costs and the tax system and the size of the domestic market — which will still matter even in the EU single market,” Szejna reportedly added.