Hyundai Motor Co., South Korea’s largest automaker, will begin construction of a factory in Brazil next year after suspending the plan due to the global recession.
Seoul-based Hyundai hasn’t set an exact date for starting the work, Vice Chairman Chung Eui Sun said at the Frankfurt auto show yesterday, according to a company e-mail today.
Hyundai boosted global market share to a record 5 percent in the first half of this year as a weaker won helped it raise spending in the U.S. The carmaker’s strength in emerging markets, including China, India and Latin America, also helped the South Korean company by making it less vulnerable to the worst of auto market meltdown in the U.S. and Europe.
“Hyundai seems to think it has leeway to embark on new projects,” said Song Sang Hoon, an analyst at Kyobo Securities Co. in Seoul. “Still, we need to see how the market will change when the plant is completed and how Hyundai can secure profit there.” He rates Hyundai “buy.”
The automaker rose 3.7 percent to 112,500 won at 11:19 a.m. in Seoul trading.
Hyundai said in September last year that it plans to build a $600 million small-car plant in Brazil to tap rising vehicle demand in Latin America’s biggest economy. The plant will be able to build 100,000 small cars a year starting from the first half of 2011, it said at the time.
Beijing Hyundai Motor Co., the carmaker’s venture with Beijing Automotive Industry Holdings Co., will also expand an existing plant, boosting total annual capacity in China to 600,000 vehicles from 500,000, the company said on Sept. 10.
A plan to add a third factory with a capacity of 300,000 vehicles is also under consideration. Hyundai has raised its goal for this year’s sales in China twice.