South Korea’s Hyundai Motor Corp. and the local partner Truong Hai Auto Joint Stock Co., or Thaco, on Thursday signed a memorandum of understanding (MoU) to develop an auto engine plant in the central province of Quang Nam.
South Korea’s Hyundai Motor Corp. and the local partner Truong Hai Auto Joint Stock Co., or Thaco, on Thursday signed a memorandum of understanding (MoU) to develop an auto engine plant in the central province of Quang Nam.
Under the deal, the two companies will form a manufacturing joint venture to develop an auto engine plant in Chu Lai Open Economic Zone in the province where Thaco has auto factories.
The joint venture will have investment capital of US$165 million. Work will start on the plant covering 20 hectares in October and the plant will go into operation in late 2012 with the first phase having an annual capacity of 25,000 units per year.
The new plant will produce Hyundai diesel 4-liter automobile engines, which will be fitted into light trucks and other industrial vehicles. Output of the factory will be for local sale and export to Southeast Asia.
Hyundai Motor said that it would step-by-step transfer the engine’s sub-parts manufacturing technologies to the local manufacturer.
Hyundai Motor Corp. vice chairman Choi Han Young in his speech at the ceremony yesterday said that Vietnam was a strategic market of Hyundai Motor.
Since July last year, Hyundai Motor has transferred its technologies to Thaco to assemble Hyundai commercial vehicles.
The local partner in May this year started production and assembling of Hyundai commercial vehicles at the company’s Quang Nam assembly plant. This marked Thaco becoming the official local automaker for Hyundai Motor’s commercial vehicles including trucks and buses.
All of Hyundai commercial vehicles in the local market will be assembled at Thaco’s auto factory in Chu Lai Open Economic Zone.
Thaco said the Hyundai vehicles production line at the factory has a capacity of 10,000 units per year. The company has rolled out the first six locally-assembled Hyundai truck, bus, dump truck and specialized truck models.
Thaco’s chairman and CEO Tran Ba Duong said that his company would research and assemble new buses and trucks as well as special-use vehicles under the instruction of Hyundai experts.
The company will develop spare parts and components according to Hyundai Motor’s standards. It will also develop more Hyundai showrooms as well as after-sales workshops across the country.
Chu Lai Open Economic Zone has attracted many auto projects. This is the reason why the authorities of Quang Nam Province are asking the Government and ministries to set up a national auto manufacturing industry center in the province’s Chu Lai Open Economic Zone.
Besides Hyundai, Kia Group has agreed to resume negotiations with the Chu Lai Open Economic Zone’s management board on a project to manufacture and assemble cars with the capacity of 100,000 units a year, which would become operational from 2015.
The investor will have to export 70% of the total output, ensure a localization ratio of 47% in the first year of operation.
(Source: SGT)
