Hyundai-Kia’s bet is on Euro 2012 championship to boost sales image

Hyundai Motor Co. (005380) and sister brand Kia have signed an agreement with UEFA, as official automotive partners for the UEFA Euro 2012.

The Korean carmaker is attracting Europeans by stepping up sponsorship of their favorite pastime, hiring soccer heroes like Germany’s Lukas Podolski and France’s Karim Benzema to promote Hyundai as part of a marketing blitz focused around the European championship, the region’s biggest tournament.

And the move might be a success considering that KIA and Hyundai booth posted strong results in May. The latest figures from the European Automobile Manufacturers’ Association show that, while new car registrations in Europe dropped by eight percent in May from a year earlier, Hyundai Motor and its affiliate Kia Motors posted gains of 7 and 30 percent, respectively.

Combined sales of the two Korean carmakers last month surpassed those of the German auto giant Mercedes-Benz and Japan’s Toyota.

Hyundai said last week it plans to ramp up production at its Czech plant to full capacity in the final stage of an expansion that saw the addition of a third shift and the hiring of 1,000 more workers.

The announcement comes less than a month after it disclosed a €475 million investment for its plant in Izmit, Turkey, where it will double production and add hundreds of jobs despite increasing concerns about Europe’s economic prospects amid its raging sovereign debt crisis.

“This represents the next piece of the puzzle in making Hyundai…a European brand,” said Hyundai Europe Chief Operating Officer Allan Rushforth.

The expansion contrasts with GM’s plans to close an Opel factory in Germany after Fiat shut an Italian plant at the end of last year. Overcapacity in Europe is projected to more than double to about 2 million vehicles in 2012, with demand forecast to drop for the fifth consecutive year.

Hyundai-Kia are the official automotive sponsors of UEFA EURO 2012, and have been UEFA European Championship sponsors since the 2000 tournament. The company will also be sponsors of the 2014, 2018 and 2022 FIFA World Cups.