Hyundai Motor, a world-leading automobile companybased in Korea, began in August 2016 producing ‘Creta’, a small-sized sportsutility vehicle (SUV) that gained high popularity in India, at its subsidiaryin Saint Petersburg, Hyundai Motor Manufacturing Russia (HMR). The plant isproducing a Creta in every 3 minutes.
In Russia,Hyundai-Kia Motors sold 324,700 vehicles last year, a drop of 13.5% from theprevious year. But their market share in Russia increased from 15.1% in 2014 to20.3% in 2015, ranking first in the market as the entire market size decreasedby 35.7%. During the first half of this year, Hyundai-Kia Motors sold 45,930units of Solaris and 39,454 units of Rio, ranking first and third in thismarket, respectively. And Solaris has been selected as the ‘Russian Car of theYear’ for 5 consecutive years.
While otherglobal automotive manufacturers such as Nissan and General Motors suspendedproduction of vehicles in Russia, Hyundai-Kia Motors increased procurement oflocal components and expanded production of price competitive small-sizedvehicles. According to a manager at Hyundai Motor Manufacturing Russia, thecompany is procuring components and parts from 11 Korea-based partners andRussian local companies. Components purchased from local companies represent46% of its total component demand.
Meanwhile, othermajor automobile companies, including Avtovaz, Renault-Nissan, Volkswagen-Skodaand Toyota sold 269,000, 211,500, 139,100 and 98,100 vehicles in Russia in 2015,respectively.
“Notwithstandingdifficult market situation, we produced 229,500 vehicles last year at the plantin Russia by working overtime even on Saturdays, thus recording plant operationrate 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 2015for the first time among automobile manufacturers in Russia,” said Kim Jong-su,Executive Director for Production Management at HMR. Executive Director Kimadded that the company supplemented functions and specifications of the vehicleto be suitable for rough geographic features by conducting test drive acrossRussia in a distance of 11,000 kilometers.
Localizedspecifications of Creta include installation of a large capacity battery tostart the engine even at low temperature of 35 degrees centigrade below zero, andadoption of heat wires in wheels and seats, as well as heat-generating glass inthe front window. It also raised the ground clearance by 10 millimeters andincreased capacity of washer liquid from 2.5 liters to 4.6 liters, considering heavyand frequent snow in the country. Traditionally, HMR has been competitive incompact vehicle and sedan markets, and now it augmented product lineup byadding an SUV, Creta.
HMR aims tofurther increase its market share in Russia by leveraging localized Creta. Thecompany plans to produce 20,000 units of Creta in Russia this year as over 150stores of Hyundai Motor across Russia have already received orders for SUVs tobe produced in two months.