Hyundai Motor, a world-leading automobile company
based in Korea, began in August 2016 producing ‘Creta’, a small-sized sports
utility vehicle (SUV) that gained high popularity in India, at its subsidiary
in Saint Petersburg, Hyundai Motor Manufacturing Russia (HMR). The plant is
producing a Creta in every 3 minutes.
In Russia, Hyundai-Kia Motors sold 324,700 vehicles last year, a drop of 13.5% from the previous year. But their market share in Russia increased from 15.1% in 2014 to 20.3% in 2015, ranking first in the market as the entire market size decreased by 35.7%. During the first half of this year, Hyundai-Kia Motors sold 45,930 units of Solaris and 39,454 units of Rio, ranking first and third in this market, respectively. And Solaris has been selected as the ‘Russian Car of the Year’ for 5 consecutive years.
While other global automotive manufacturers such as Nissan and General Motors suspended production of vehicles in Russia, Hyundai-Kia Motors increased procurement of local components and expanded production of price competitive small-sized vehicles. According to a manager at Hyundai Motor Manufacturing Russia, the company is procuring components and parts from 11 Korea-based partners and Russian local companies. Components purchased from local companies represent 46% of its total component demand.
Meanwhile, other major automobile companies, including Avtovaz, Renault-Nissan, Volkswagen-Skoda and Toyota sold 269,000, 211,500, 139,100 and 98,100 vehicles in Russia in 2015, respectively.
“Notwithstanding difficult market situation, we produced 229,500 vehicles last year at the plant in Russia by working overtime even on Saturdays, thus recording plant operation rate of 114% which is much higher than the average plant operation rate of 33%. We exported 14,112 vehicles to 9 countries including Egypt and Lebanon in 2015 for the first time among automobile manufacturers in Russia,” said Kim Jong-su, Executive Director for Production Management at HMR. Executive Director Kim added that the company supplemented functions and specifications of the vehicle to be suitable for rough geographic features by conducting test drive across Russia in a distance of 11,000 kilometers.
Localized specifications of Creta include installation of a large capacity battery to start the engine even at low temperature of 35 degrees centigrade below zero, and adoption of heat wires in wheels and seats, as well as heat-generating glass in the front window. It also raised the ground clearance by 10 millimeters and increased capacity of washer liquid from 2.5 liters to 4.6 liters, considering heavy and frequent snow in the country. Traditionally, HMR has been competitive in compact vehicle and sedan markets, and now it augmented product lineup by adding an SUV, Creta.
HMR aims to further increase its market share in Russia by leveraging localized Creta. The company plans to produce 20,000 units of Creta in Russia this year as over 150 stores of Hyundai Motor across Russia have already received orders for SUVs to be produced in two months.
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