Tim Gosling in Prague -
With the EU reportedly mulling the possible introduction of duties on South Korean car imports, rising protectionism in Europe could help boost major export centres in the Czech Republic and Turkey. Should that happen, Hyundai and Kia are likely to look to boost sales to the European market from their two major production plants in the region, analysts say.
Brussels said on August 7 that it is examining a request from France that South Korea give advanced warning of planned car exports into the EU, according to Reuters. Analysts suggest that should the EU agree to the advanced surveillance, it could be the first step towards the reintroduction of duties, which are permitted under a free trade agreement signed with Seoul in 2011.
The French demand is driven by the struggles of its carmakers to adapt to competition and the ongoing crisis, particularly at their older production sites in Western Europe. PSA Peugeot Citroen in July announced plans to close a plant near Paris and cut 8,000 jobs.
The company's joint plant with Toyota in the Czech Republic also announced it is to shed 345 jobs, but its Slovak factory has hired 900 new hands as demand for the smaller cars that the modern plant there turns out spikes in both crisis-hit Europe and emerging markets.
That dynamic has also helped boost market share for the likes of Hyundai and Kia, according to Arirang News, by around 10% in 2011, while the overall market shrank 2%. In terms of imports from South Korea, those totaled 345,000 vehicles, though that's well below the 640,000 units recorded in 2007, because cars sold in the EU are increasingly built in Europe, or close by.
South Korea's biggest car seller in Europe, Hyundai, has its two main plants in the region in the Czech Republic and Turkey. It has recently announced plans to double annual capacity at its Turkish plant in Izmir to 200,000 units by June 2013. The plant produces the i20, a compact hatchback popular in Europe, where 70% of the plant's output is shipped. Carmakers are also increasingly keen on using Turkey as a base from which to tap emerging markets in the Middle East and North Africa.
"The growth of Hyundai in Europe is based on products designed, engineered and built in Europe," Andreas Brozat, a spokesman for Hyundai, was quoted by Reuters as saying. "Less than 12% of the 232,454 Hyundai cars registered in Europe during the first half of 2012 were built in Korea, while 70% came from the European region."
bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more
bne IntelliNews - Following a smorgasbord of acquisitions in late summer, China Energy Company Limited (CEFC) is eyeing yet another small Czech purchase, with food ... more
Benjamin Cunningham in Prague - Even as the Czech governing coalition remains in place and broadly popular, tensions between Prime Minister Bohuslav Sobotka and Finance Minister Andrej Babis remain ... more