Hyundai Motor Co, South Korea's top automaker, said on Sunday it plans to raise vehicle kit exports to Russia by 60 percent next year in a bid to expand its market presence in the fast rising car market.
Kim Dong-jin, Hyundai's vice chairman and CEO, said Hyundai would sell car parts, including knock-down kit forms, for 80,000 vehicles in 2008 to TAGAZ, which assembles Hyundai's passenger cars, compared to 50,000 units this year.
"We see Russia, an emerging market, has a high growth potential," Kim told reporters on the sidelines of a funeral for Byun Joong-seok, wife of late Hyundai Group founder Chung Ju-yung.
Hyundai sold 67,439 vehicles in Russia over the first seven months of the year, about 20 percent higher than 56,294 units a year ago, data from the Association of European Business in the Russian Federation showed. Sales of foreign car brands in Russia jumped 67 percent during the seven months to 861,736 units, according to the data.
Over half of Hyundai cars sold locally are already produced by the independent Taganrog car plant (TAGAZ) in southern Russia under a license agreement.
Russia's car market is booming thanks to fast economic growth and consumers' increasingly easy access to credit.
The country lures foreign automakers with tax breaks on assembly plants, while its largest carmaker, Avtovaz, is losing market share.
Hyundai, the world's No 6 auto maker along with its affiliate Kia Motors Corp, is expanding overseas units to cushion against the impact of a higher won currency and labour stoppages at homes.
Hyundai and Kia plan to have around half their output - or more than 3 million vehicles - abroad within the next four years. Last year, they made 1 million units abroad.
Hyundai, which has factories in the United States, China, India and Turkey, is adding another plant in the Czech Republic. Kia has factories in China and Slovakia and is building one in the United States.
Meanwhile, Kia's president and CEO Cho Nam-hong said it aims to post 1 trillion won ($1.05 billion) in operating profit in 2010, helped by cost cuts and new products, according to a Hyundai Motor Group spokesman.
Kia, South Korea's No 2 auto maker, posted an operating loss of 125.3 billion won last year. Cho said Kia planned to invest 3 trillion won by 2010 in developing nine new cars, the Hyundai spokesman added. On Friday shares in Hyundai ended down 1.4 percent at 70,500 won in Seoul's main stock market, which closed 3.19 percent lower. Kia fell 2.46 percent to 11,900 won.