Hyundai Automotive South Africa today officially opened a commercial vehicle assembly plant on the East Rand of Gauteng as part of a multi-million rand investment in its Commercial Vehicle division in the local automotive market.

“The opening of this assembly plant forms an ideal platform from which to strengthen our business strategy, both in terms of commercial market growth and sustainability, as well as an increasing commitment and investment in the South African economy,” says Wade Griffin, director of Commercial Vehicles at Hyundai Automotive SA.

“We believe that there are strong opportunities through investment and local assembly to capitalise on for our business. This substantial investment will also help to improve local skills and to create jobs in an economy that is in dire need of such opportunities.”

The rationale behind the Semi-Knocked-Down (SKD) assembly plant in Apex, the industrial area of Benoni, was largely driven by a long-term strategy to grow Hyundai’s share in the South African commercial vehicle market, to be more competitive and to increase Hyundai’s investment in the country’s economy. The initial aim is to produce 50 units a month, focusing specifically on the Hyundai HD65 and HD72 trucks.

At this stage most of the trucks produced in the plant will be distributed in the South African market, but Hyundai Automotive SA is investigating options to export to markets in the Sub-Saharan region of Africa. Of the vehicles assembled in the Benoni plant, 20% will be exported to neighbouring Southern African countries such as Botswana and Namibia as part of the immediate plans.

Hyundai Automotive SA established the factory by buying an existing plant from Imperial Holdings as part of a R110 million investment in the Commercial Vehicles division of Hyundai in South Africa.

“We did careful research to establish the economic viability and sustainability of such a SKD assembly plant. Hyundai Commercial Vehicles is a division of Hyundai Automotive SA – one of the main players and biggest sellers in the South African automotive market. This investment in our Commercial Vehicle division enables us to be more aggressive and competitive due to the zero import duty as an incentive for local assembly of trucks,” says Griffin.

Stanley Anderson, marketing director of Hyundai Automotive SA, says it is important to note that the company’s investment reaches beyond the monetary aspect. “We have already employed over 30 staff, with the vision of increasing this to around 60 people. By creating these intitial 30 or so jobs, we are directly improving the lives of more than 230 people.

“However, there are at least an additional 10 people that can gain employment as a result of the development of this plant, if we consider our current service partners. And further job security too, if you include other suppliers in terms of logistics, maintenance, cleaning, security and information technology services.”

Hyundai has brought in a number of trained engineers from Hyundai Motor Company’s Commercial Vehicle division in Korea to assist with the local training and development of staff to ensure that best practices are followed in the assembly process. From here, the Hyundai Training Centre at the head office of Hyundai Automotive SA will be responsible for ongoing training.

“We have already produced the first trucks from the assembly plant. The local production of HD65 and HD72 trucks will give us a lot of momentum to increase our present 3% share in the medium commercial vehicle market,” says Griffin.

An increase in local content of the vehicles that are assembled in the plant will bring further savings, a more competitive business model and create further jobs in the local economy. “We are obviously at an early stage in the development of the local operation, but we are already examining the expansion of locally produced parts for our assembly line,” says Griffin.

“We chose the premises in Benoni for two reasons: There was an existing infrastructure and suitable buildings and storage areas to run such a plant; and it is situated in the economical hub of South Africa – Gauteng – where there is a big demand for products such as our HD65 and HD72 trucks.

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