Hyundai Motor Group recently set up a new major division exclusively in charge of controlling overseas factories, a local media report said.
The new division, called the global plant coordination division, is located at the Korean auto giant’s Seoul headquarters to oversee 15 factories in eight countries that the Hyundai and Kia brands operate globally, the Korea Herald reported.
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Lim Young-deuk, former chief of Hyundai Powertech, a transmission maker affiliated with the carmaker, was named Tuesday to lead the new division that consists of some 90 people.
Lim, who also worked at Hyundai’s Czech and Alabama plants, is known to have expertise in managing overseas production within the group, according to industry sources.
“The new division is aimed at supporting better communications between overseas factories and the Seoul headquarters,” said a Hyundai spokesperson. “More streamlined monitoring will be carried out for quality control.”
The new body comes as group chairman Chung Mong-koo has put more emphasis on overseas markets in recent months, following the lukewarm domestic sales and some recalls.
At a meeting with regional chiefs on 16 July, the Hyundai chief ordered them to shore up production and sales policies, citing expected threats such as slowing sales in lucrative markets including Europe, India and Russia and the cheaper Japanese yen.
“As the domestic market is expected to continue to suffer in the latter half of this year, we need to focus more resources on overseas markets,” Chung said.
Earlier in April, he hinted to move more car production abroad, stressing overseas operations to enhance readiness for possible expansion.
Hyundai Motor and its affiliate Kia Motors have strived to localise production to build cars closer to where they are sold as it cuts costs, reduces the company’s exposure to shifting exchange rates and helps ease trade friction.
As the result, the carmakers are now cranking out more vehicles overseas than in Korea.
In the first half of this year, overseas production at Hyundai and Kia made up 61.5% and 43.4% of their total output, respectively, compared to 12.5% and 5.7% a decade ago.
Hyundai Group last year completed its global production network with the completion of a Brazil plant in November. Currently, Hyundai operates seven factories in 10 countries, while Kia owns five factories in three nations.
A new round of expansion is also expected at factories, such as those in Turkey and China.
Hyundai and Kia sold 3.83m vehicles in the first half, up 7% from 3.57m a year ago.
