Johannesburg - Hyundai South Africa has commenced with the local assembly of a light commercial vehicle after investing R110 million in a commercial vehicle plant in Benoni, its commercial vehicle dealer network and employee training.
Marketing director Stanley Anderson said on Friday that the first Hyundai H100 bakkie rolled off the assembly line last month and the plant was currently busy with the semi- knocked down (SKD) assembly of the second batch of 60 units.
“We are ramping up slowly to ensure the right processes are in place. Our aim is to increase our assembly to 360 units a month by September,” he said.
The plant, which previously used to assemble the International truck brand and was acquired from Imperial Holdings, also assembles the Hyundai HD65 and HD72 medium duty trucks on an SKD basis.
ECONOMIES OF SCALE
Anderson said the assembly of the bakkies would give Hyundai Automotive SA additional volumes in the plant and economies of scale to improve its viability while the social responsibility of creating jobs was also a big consideration.
Wade Griffin, the director of commercial vehicles at Hyundai Automotive SA, said this second phase of SKD assembly at the plant had increased the number of employees on the site to a total of 51, with further potential growth of the factory’s workforce.
“If one considers the indirect effect at an average ratio of seven to one that the employment of a single worker has on those that he or she supports, then the establishment of the assembly plant has already touched the lives of about 370 people,” he said.
COASTAL UNITS TO BE IMPORTED
Anderson said Hyundai Automotive SA would still import some H100 bakkies as fully built-up (FBU) units, because it did not make sense to import the SKD kits, assemble them at the Benoni plant and then ship them back to the coastal regions. He expressed confidence they would sell about 450 H100 units a month, of which 360 units would be assembled locally. The 360 locally assembled bakkie units would be for distribution and sale in Gauteng and the surrounding provinces.
He said the flexibility to import FBU bakkie units would enable them to react quickly to urgent orders.
“If the market demand is only 360 units for the whole country, then we will send them to Durban and Cape Town from our plant,” he said.
Anderson said Hyundai Automotive SA had sold almost 60 000 units of this bakkie into the South African market since it took over the Hyundai brand in the country.
5000 UNITS A YEAR
“We sold between 400 and 450 a month, which amounts to about 5000 units a year that we put on the roads,” he said.
Anderson said the H100 vehicles were built on the Hyundai line in Ulsan in South Korea and disassembled, packed and shipped to South Africa, with 30 bakkies loaded into 10 containers.
He said Hyundai Automotive SA looked after the Namibian and Botswana markets, but was not looking to export the bakkie into any other neighbouring territories.
However, Anderson said they sold quite a lot of parts to the 43 Hyundai distributors in Africa, particularly in Malawi, Zambia and Mozambique, because the lead time to source these parts from South Africa was so much shorter than importing them from South Korea.
Business Report