Hyundai Motor Witnesses Decreased Factory Operation Rates in Vietnam and Brazil

17 Aug, 2023

Hyundai Motor Witnesses Decreased Factory Operation Rates in Vietnam and Brazil

Despite Hyundai Motor achieving a global factory operation rate surpassing 100% in the initial half of the current year, a decline was evident in specific nations, including Vietnam, in contrast to the same period the previous year.

According to Hyundai's semi-annual report released on August 16, the production capacity of global business sites, excluding the Chinese joint venture, escalated by 4.4% to reach 1,961,386 units during the first half of this year compared to the prior year. Additionally, global factory production performance exhibited a 14.4% upswing, totaling 2,002,361 units during the corresponding period of the previous year.

Among the notable highlights, domestic factories stood out with the highest operation rate, registering an increase of 6.8 points to attain 107.5%. Turkey's factory followed at 105.2%, marking a rise of 4.4 points, while the Czech factory achieved 103.1%, reflecting an 8.4-point surge. Similarly, the operation rates in India (102.1%) and North America (103.1%) demonstrated substantial growth, surpassing the 100% mark when compared to the prior year.

However, Hyundai's Vietnam-based factory, often recognized as its Southeast Asian production hub, encountered a significant double-digit plummet in its operation rate due to economic challenges. The operation rate for the first half of the current year plummeted to 58.9%, marking a drastic decline of 22 points compared to the same period in the preceding year. Notably, car sales in Vietnam from January to May plummeted by 35% to 113,527 units compared to the equivalent period last year. An industry expert commented that the Vietnamese car market, though ranking fourth in Southeast Asia, is undergoing a rapid decline in demand for new cars, leading to a substantial market contraction. This scenario has prompted not only Hyundai but also local manufacturers to contemplate innovative strategies.

The Brazilian factory reported an operation rate of 90.0%, a decrease of 2.3 points from the previous year. The Brazilian automobile market's deceleration is attributed to rising interest rates and elevated inflation.

As unmentioned in the semi-annual report due to the ongoing Ukraine conflict, the Russian factory's operation status remains unclear. In the preceding year, Russian production capacity amounted to 99,100 units, with an actual production of 42,821 units, indicating an operation rate of 43.2%. However, this data was conspicuously absent from the recent report.