Hyundai to Increase Investment in Czech Plant

Will increase capacity to 300,000 cars per year

Over the next two year Hyundai will invest 130 million euros (US$183 million) in its Czech plant to boost car and gearbox output as of 2011.

"The investment will allow us to raise output from the installed capacity of 200,000 cars a year to 300,000," Hyundai Motor Manufacturing Czech spokesman Petr Vanek said.

Gearbox output is expected to rise from an installed 300,000 to 500,000 in 2011, he added.

"We produce gearboxes not only for ourselves, but also for the sister KIA plant in Slovakia, which is why there are more gearboxes than cars," said Vanek.

Vanek said earlier the Czech plant had produced 50,000 Hyundai i30 cars in the first half of the year -- mainly for the German, Russian and British markets -- against its full-year plan to turn out 185,000 units.

The plant in the eastern Czech village of Nosovice has been grappling with thinning demand caused by the global downturn ever since it launched production last November, despite its focus on small and economical cars. Hyundai has trimmed production to a single shift, but it is planning to start a second shift in the summer and to have three-shift operation in 2011.

"We have about 1,900 staff now, and another 100 will start on August 10," said Vanek, adding Hyundai was one of few large companies in the region that keeps hiring people amid the economic crisis.

He said that "everyone in the industry is convinced the car crisis is a temporary phenomenon that affected last year and will affect this year." "But we are talking about 2011 here, and we are convinced output will get back to standard figures by that time," he added.

Along with Volkswagen and a Japanese-French joint venture TPCA of Toyota, Peugeot and Citroen, Hyundai is one of three big car makers based in the Czech Republic.

Copyright Agence France-Presse, 2009

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