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The South Korean automaker has announced it is investing another US$155 million in its Brazilian manufacturing plant located in Piracicaba, state of Sao Paulo, to boost the production capacity if its new SUV.
William Lee, President, Hyundai Brazil, has announced the manufacturer is injecting another US$155 million into its manufacturing plant in Piracicaba. Inaugurated in November 2012, Hyundai invested US$700 million to set up the facility, which initially had a capacity of producing 150,000 units a year.
With this new investment Hyundai hopes to increase the current production by 10,000 units from 180,000 to 190,000. The plant manufactures the HB20 model and will also start producing the new Hyundai Creta SUV to be commercialised in the country in early 2017.
The remaining US$25 million will be used in the development of a new research centre within the Piracicaba manufacturing complex.
“I’ve been in Brazil for the past four years and I see a country that has a great capacity for development. The country is going through difficult moments but I think it will have its momentum as from next year”, said Lee. “We don’t just invest in cars; we also import crude steel from Brazil. It is a strategic country for Hyundai”, he added.
Net profit for the world’s fifth-biggest automaker, together with affiliate Kia Motors, slipped for the tenth consecutive time in the second-quarter of 2016. Hyundai registered a 2.6% drop to US$1.46 billion in the April-June 2016 period compared with the previous year, but revenue rose 8% and operating profit was up 0.6% - reflecting a 4% increase in the company’s global vehicle deliveries in the period to 1.29 million vehicles, driven by a rebound in China.
The South Korean automaker is said to have the highest sales exposure to emerging markets like Brazil and Russia, meaning it is highly vulnerable to weaknesses in these regions. Sales from its Brazil factory slipped 6% in the second quarter of 2016.
Sources: Automotive Business/Fortune