FAR EAST: SOUTH KOREA REPORT
A joint venture between South Korea’s Hyundai Motor and Vietnamese conglomerate Thanh Cong Group has started operations of an automobile plant in the northern Vietnamese province of Ninh Binh.
With an annual production capacity of 100,000 vehicles, the combined annual production capacity with the existing plant will reach 180,000 by 2025. The company will ship domestically as well as to neighboring countries. The new plant, operated by the joint venture Hyundai Thanh Cong, will have an investment of 3.2 trillion dong (about 18 billion yen). The plant will cover an area of approximately 50 hectares and include a test driving course.
Hyundai Motor Company entered the Vietnamese market in 2009, and in 2021 the company sold approximately 70,000 new vehicles in the country, more than Toyota. They are now believed to have surpassed Toyota Motor Corp. to become the largest domestic automaker by brand.
Source: The Nikkei
PSR Analysis: The presence of Korean products in Vietnam is high. It is easy to see Korean brands not only in automobiles, but also in home appliances. This news is a remarkable indication of the penetration of Korean-made products in the local market. Korean car manufacturers are increasing their market share in Vietnam partly because of their lower prices compared to Japanese cars, but also because of the success of their customization strategies tailored to local needs. A market source analyzed the local models of Hyundai and Kia, saying, “Compared in the same class, Hyundai and Kia have an advantage over Japanese cars in that they sell customized models with various options at a lower price.” PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia for Power Systems Research
