Hyundai Group plans to sell 7 million vehicles in 2012, up by 400K over 2011
Focusing on quality improvement
2012/04/27
- Summary
- Hyundai Group's sales to increase from 6.6 million vehicles in 2011 to 7 million in 2012
- The Group's overseas production capacity at the end of 2012 is 3,640,000 vehicles
- Beefing up production capacity in Korea, leveraging the weak Won and FTA to expand exports
- Introducing new models in succession to refresh product portfolio in 3 to 4 years
- Hyundai's brand value: Structural improvements in the US market
- Hyundai Group's business results: Faster growth of sales revenues than sales volume, profits than revenues
Summary
Hyundai Motor Group has achieved rapid quantitative expansion coupled with qualitative improvement in recent years. In 2011, the group sold 6.6 million vehicles (up 14.9% from the previous year) and kept the fifth place among automakers in global sales that the group earned in 2010. Hyundai Motor registered a 16.1% increase in revenues (excluding those of Kia's) to 77,798 billion Won (approx. US$ 68.244 billion) and 35.1% increase in net income to 8,105 billion Won (approx. US$ 7.11 billion).
Hyundai earned the North American Car of the Year award with the Genesis in 2009 and the Elantra in 2012 raising Hyundai to the same level as the Japanese, American and European automakers in terms of quality competition.
In 2009, Hyundai began platform integration efforts to reduce costs and the lead time of product development. As a result, the vehicles based on the six integrated platforms accounted for 62.1% of Hyundai's global production in 2011.
Hyundai's US plant began to operate in 2005, followed by the construction of Kia's US plant and Hyundai's assembly plants in China and Europe, and the group's combined capacity rose to 6,540,000 vehicles at the end of 2011. As Hyundai's third plant in China and its plant in Brazil are scheduled to start operating in the second half of 2012, the total capacity will rise to 7,150,000 vehicles by the end of 2012.
The group's goal for global sales in 2012 is set at 7 million vehicles, a rather conservative figure considering its rapid growth in the past two years. However, Hyundai Motor's global utilization rate was 107.4% in 2011 and the limited production capacity is preventing the Hyundai Group from drastic sales expansion in 2012. Hyundai is seeking a qualitative improvement in 2012, rather than excessive volume expansion, considering the need to maintain quality and the suppliers' production capacities.
As a way to increase production capacity, Hyundai will expand production at its plants overseas and at home as well. Hyundai Motor Group will build a new line with an annual capacity of 160,000 vehicles at Kia Motors' Gwangju plant. By doing so, the group plans to increase exports of a broader range of models including luxury models leveraging the weak Won and FTA that Korea concluded with EU and the US.
Related Reports:
Detroit Auto Show 2012 (3): Korean and European OEMs (Mar. 2012)
Korea: Hyundai/Kia expands overseas production capacity to 4.14 million in 2012 (Sep. 2011)
Features on new Hyundai/Kia vehicles: fuel-thrifty engines and start/stop systems for higher fuel efficiency (Jun. 2011)
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