Hyundai production to stay in South Korea despite disadvantages

Article by Anita Panait, on November 13, 2013

Despite the disadvantages presented by producing vehicles at its home turf in South Korea, Hyundai Motor Co. will still stick to its local production base. Those disadvantages include longer production time – Hyundai’s local output builds a car on an average of 28 hours, almost twice as long as it is in the United States.

This is despite the fact that Hyundai employs more workers for each production line in South Korea than in the US. Hyundai also has to deal with high wages, frequent work stoppages and outdated facilities. Hyundai's hourly labor costs per worker in South Korea is pegged at KRW24,778 ($22.26) --  16 percent higher than at its US plants.

While the carmaker’s seven domestic plants have helped make it the fifth-largest auto manufacturer in world, they have become a legacy asset that has to be addressed to sustain profit growth.

One of Hyundai’s plants in Ulsan is now its oldest and costliest facility, and it would be for the carmaker’s benefit to shut it down. But Hyundai reiterated that it is not closing its South Korean manufacturing base, saying that fixing productivity issues with its strong local union is a top priority.

“Our home market is our root and the base for our growth overseas. And there's a risk in building cars overseas," according to a Hyundai executive from the team who manages its labor relations. Hyundai's labor union elected the moderate Lee Kyung-hoon as its new president, signaling a period of a more stable industrial relations between the union and the carmaker.

If you liked the article, share on:

Comments

Recommended

Kia’s Sorento midsize sports utility vehicle is reaching its mid-cycle for the 2018 model year. Thus, its fans, enthusiasts and satisfied customers are expecting the Sorento to receive an update...
by - July 22, 2017
The Lotus Evora Sport 410 astonished the world after arriving as the more powerful and lighter edition of the already impressive Evora 400. Now, Lotus Cars is throwing in another...
by - July 22, 2017
The Europe-bound WRC hatch developed by Toyota and Gazoo Racing team will be limited to just 400 examples as reported by AutoCar this week. Otherwise known as Gazoo Racing Masters...
by - July 21, 2017
Even cops get excited when they’re assigned to drive the best cars in the market. In Austria, police officers drive around in a Porsche 911 Carrera while in Milan, authorities...
by - July 21, 2017
Subaru has already announced that the all new Impreza will be out by fall this year. The 2018 model year not only gets a number of new upgrades, but it...
by - July 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries