Hyundai Motor Expands Production Bases to Africa After India and the Middle East: "Securing New Markets"

Plants in India and Saudi Arabia to Be Completed Within the Year

Hyundai Motor is accelerating the expansion of its overseas manufacturing bases. This year, the company is set to complete the construction of plants in both India and Saudi Arabia, while also pursuing the establishment of a factory in Africa. By localizing its operations to suit emerging markets, Hyundai Motor aims to diversify its overseas markets, which have traditionally centered on the United States and Europe, and to lay the groundwork for future growth.

According to the industry on June 9, Hyundai Motor is preparing to complete its joint venture plant in Saudi Arabia following the Pune plant in India by the end of the year. The Pune plant, Hyundai Motor’s second manufacturing base in India, originated from the acquisition of General Motors’ Talegaon plant in the United States in 2023. After remodeling, the plant began producing the new Venue and other models in October of last year. With an initial annual capacity of 170,000 units, Hyundai Motor plans to expand production lines to reach an annual output of 250,000 units by 2028.

In particular, Hyundai Motor Group plans to invest a total of 450 billion rupees (about 7.2 trillion won) in the Chennai plant in India by 2030 to establish a large-scale electrification infrastructure. With an annual production capacity of 824,000 units at the Hyundai Motor Chennai plant and 431,000 units at the Kia Anantapur plant, the group will secure a total production capacity of 1.5 million units in India.

This year marks the 30th anniversary of Hyundai Motor’s entry into the Indian market, which began in 1996. India, with the world’s largest population and an average age in the late twenties, is considered a country with high growth potential.

Hyundai Motor has also recently started operation of a CKD (completely knocked down) plant in Thailand. Hyundai Motor Thailand (HMTH) received approval from the Board of Investment of Thailand (BOI) in 2024, invested about 1 billion baht (about 40 billion won), completed construction in Samut Prakan Province last month, and has commenced mass production. The annual production capacity is 5,000 units, with a sales target of 3,000 units for this year.

The CKD method involves sending key components to the local market for assembly instead of exporting complete vehicles. This approach allows for lower initial investment and enables rapid establishment of a local production system.

Hyundai Motor Company Saudi Arabia Manufacturing Corporation

Using the same CKD approach, the Hyundai Motor Saudi Manufacturing Corporation, a joint venture between Hyundai Motor and Saudi Arabia’s Public Investment Fund (PIF), is also targeting to commence operations by the end of this year. This marks the first manufacturing facility to be established in the Middle East and construction began in May last year. Hyundai Motor holds a 30% stake, while the Public Investment Fund owns 70%. The plant is designed to allow mixed production of electric and internal combustion vehicles, with an annual capacity of 50,000 units.

However, the prolonged war in the Middle East remains a variable. Euisun Chung, Executive Chair of Hyundai Motor Group, commented last month regarding the situation in the Middle East, stating, “We are building a plant in Saudi Arabia, but it seems it will be delayed, and sales in the Middle East have dropped significantly. Although the war will end soon, we need to make thorough preparations to perform well once it is over.”

Hyundai Motor is also expected to accelerate its expansion into the African market. The leading candidate is Ghana. On June 1, Samuel Okudzeto Ablakwa, Ghana’s Minister for Foreign Affairs, formalized the construction of a Hyundai Motor plant in Ghana within this year. After a meeting with Minister Cho Hyun of the Ministry of Foreign Affairs, Minister Ablakwa stated on social media, “This year, Korea and Ghana will open a new university in Ghana, establish a West Africa production plant for Hyundai Motor, and introduce a new solar-powered irrigation system.”

Hyundai Motor has been making sustained efforts to enter the African market. In particular, Executive Chair Chung’s direct participation in the 2024 Korea-Africa Business Summit highlights Hyundai Motor's strong interest in the continent. Currently, the Stallion Group, a Hyundai Motor dealership in Ghana, operates an assembly facility built with its own investment. Given local conditions, the CKD method is considered the most likely approach. However, a Hyundai Motor official stated, “Investment in manufacturing facilities in Africa has not yet been finalized.”

This content was produced with the assistance of AI translation services.