Hyundai Motor Co. will become the first foreign automaker to launch a full-capacity press forging unit at its St. Petersburg car assembly plant, which starts production in September, a Russian business daily said on Friday.
Hyundai began building the $450-million plant in St. Petersburg's Kamenka industrial estate in June 2008. The new plant will have an initial annual production capacity of 100,000 vehicles, which the company plans to expand to 150,000 vehicles.
Vedomosti cited Hyundai spokeswomen Yulia Tikhonova as saying that the company had invested over $30 million in the forging unit and it would completely meet the plant's production demands.
Forging is one of the most costly aspects of the car manufacturing process and is only profitable when combined with large scale production. Other foreign car makers have been reluctant so far to launch forging units at their assembly plants in Russia.
Hyundai is hoping to reach the initial production capacity within a few months of launching the plant and ensure a quick return on investment in the forging unit, which will allow the company to better control the production cost and maintain its high quality standards.
Hyundai sold a total of 74,607 vehicles in Russia in 2009, becoming the No. 3 foreign brand after Ford Motor Co. and General Motors Co.'s Chevrolet.
In the first two months of this year, Hyundai sold 11,821 units in Russia, accounting for 10.4% of the imported car market.
MOSCOW, May 14 (RIA Novosti)
