Hyundai plans to increase production at its Brazilian plant in Sao Paolo, according to a report in the Korea Herald. The newspaper cites a Hyundai official as saying the company will increase production by 5,000 units a year to 185,000 units from 2014 onwards. The extra capacity is intended to support the HB20, which has been among the bestselling vehicles in Brazil's currently difficult market and is the company's first vehicle designed exclusively for the Latin American region. The plant has steadily increased production, moving from one shift to two per month after production started, and adding a third shift in September 2013. Separately, the Korea Herald added detail to the expected news of Kia's upcoming Mexican plant, indicating that Kia expects to sign a memorandum of understanding with the state of Neuvo Leon for a plant to be built in Monterrey; while previous reports have indicated production of the Forte, Soul, and Rio, the new reports indicate the Forte, Soul, and Morning/Picanto minicar. Mexican production will be sold primarily in the US, Canada, Mexico, and possibly Latin America.
Significance: Through May 2014, Hyundai's HB range holds the third-place slot among Brazil's top-10 vehicles, selling 67,042 units in the year to date to secure a 6.7% share and achieve a 14.0% growth rate in a market down 5.4% for the year. IHS Automotive forecasts Hyundai will add the ix25 in Brazil in 2016, which will bump output past 200,000 units from 172,382 units in 2013, and forecasts 189,000 units in 2014. Through the forecast period, the facility's production may expand to about 220,000 units per annum. We expect a formal announcement for Kia's plant in July. Hyundai has faced capacity constraints globally, which have impacted market share. The Brazilian production adjustment, Kia's Mexico plant, and the fourth production plant planned for China are geared for localised production, and for vehicles at the lower end of the price scale. However, the plant in China appears to be facing delays .
