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SOUTH KOREA: East Europe exports soar

By just-auto.com editorial team | 4 April 2008

South Korean car exports to eastern Europe rose more than 13 times between 2001 and last year, the Korea Automobile Manufacturers Association (KAMA) said.

It's a sign that the Korean automakers are relying less and less on the United States to maintain growth, the Korea Herald noted.

They're building them there, too. Kia already has a plant in Slovakia churning out several body style variants of its Ceed line as well as the Sportage small SUV while parent Hyundai is readying a Czech Republic facility. Both firms have R&D facilities in Germany.

Tony Whitehorn, managing director of Hyundai UK, said at the Geneva show last month that, since the South Korean company took control of its UK distribution two years ago, there was now a clear vision for Europe with a head office in Frankfurt and a new factory opening in the Czech Republic.

Whitehorn said then: "Europe is clearly a focus area for the Hyundai Automotive Group with Kia's factory just 40 miles away from ours."

Hyundai's Czech Republic factory will build the i30 and the Tuscon, mirroring Kia's Slovakian production of the Ceed and Sportage - the i30/Ceed and Tuscon/Sportage essentially share their respective platforms and drivetrains.

Senior Hyundai executives have also talked about establishing an assembly plant in Russia.

According to KAMA, South Korean carmakers' exports to eastern European countries rose 1,389% from the 32,206 units recorded in 2001 to over 447,000 units last year.

With the increase, the region has become the country's third-largest automotive export destination, accounting for 15.7% of last year's car exports, the report said. In 2001, automotive exports to eastern European countries only accounted for 2.1% of the total. It had been the smallest export destination among the eight regions in KAMA's statistics.

The eight regions are Africa, Asia, Central and South America, eastern Europe (including Russia), North America, the Pacific, western Europe and the Middle East.

Over the same period, the value of the country's automotive exports to eastern Europe increased by more than 20 times to about US$4.79bn. The value of the country's car exports to the region in 2001 was $224.8m.

According to the Korea Herald, by country, Russia was the largest importer of Korean cars in the region followed by the Ukraine. Russia in 2007 imported more than 255,000 vehicles, accounting for 57% of Korean firms' exports to the region. The Ukraine took about 68,700 vehicles, accounting for 15.3% of eastern Europe's imports.

In comparison to 2001, the number of vehicles shipped to Russia and the Ukraine rose by 459% and 569%, respectively.

KAMA reportedly said the skyrocketing imports in eastern Europe were due to the expansion of their automotive markets, brought on by rapid economic growth in the region.

After eastern Europe, exports to Africa rose by the highest margin, followed by the Middle East and Central and South American countries. Exports to Africa and the Middle East rose by 457% and 390%, respectively, the paper added.

In Central and South American countries, Korean car imports rose by 252%.

Although North America has maintained its position as the largest importer of Korean cars, its proportion has gone down, from 46% in 2001 to 29.3% last year. The second largest export destination for local carmakers is western Europe, accounting for 19.3% of the country's total automobile exports last year.

From 2001 to 2007, exports to North America and Western Europe increased by 20% and 28.7%, respectively, the Korea Herald said.