Hyundai Automotive South Africa (SA) opened a semi-knocked-down (SKD) assembly plant in Apex, Benoni, in September, as part of a multimillion-rand investment in its commercial vehicle division in the local automotive market.
The rationale behind the SKD commercial vehicle assembly plant was largely driven by a long-term strategy to expand Hyundai’s share in the South African market to increase the company’s competitiveness and its investment in the country’s economy, says Hyundai Automotive SA commercial vehicles director Wade Griffin.
“The initial aim is to produce 50 units a month, focusing specifically on the Hyundai HD65 and HD72 trucks,” he adds.
“The versatile HD65 and HD72 trucks are classified as medium-sized commercial vehicles and there is a very wide application for them. “They can be fitted with a drop-side open load carrier on the chassis, or a secure and completely covered load box. We also have customers who fit refrigeration units on the chassis for transportation of food, such as meat or poultry,” says Griffin.
Hyundai Automotive SA established the factory by buying an existing plant from industrial services group Imperial Holdings as part of a R110-million investment in the commercial vehicles division of Hyundai in South Africa.
Griffin says the assembly plant also forms an ideal platform from which Hyundai can strengthen its business strategy in terms of commercial market growth and sustainability.
“We believe that there are strong opportunities through investment and local assembly to capitalise on our business. This substantial investment will also improve local skills and create jobs in an economy that is in dire need of such opportunities.”
Most of the trucks produced at the plant will be distributed in the South African market, but Hyundai Automotive SA is investigating export options to countries in the sub-Saharan Africa region, says Griffin.
He adds that, of the vehicles assembled at the Benoni plant, 20% will be exported to countries, such as Botswana and Namibia, as part of the company’s immediate plans.
Careful research was done on the economic viability and sustainability of establishing a SKD assembly plant, Griffin adds. “This investment in our commercial vehicle division enables us to be more aggressive and competitive, owing to the zero import duty as an incentive for the local SKD assembly of trucks according to the Automotive Production and Development Programme, which last year replaced the Motor Industry Development Programme.”
Hyundai Automotive SA marketing director Stanley Anderson says it is important to note that the company’s investment extends beyond the financial benefits, as more than 30 staff members have already been employed, with the aim to increase this number to about 60 when the production of Hyundai’s H100 Bakkie out of the plant reaches full potential.
He adds that the intitial job creation for more than 30 people enables the company to directly improve the lives of more than 230 people.
“However, there are at least another ten people that can be employed as a result of the development of this plant, if we consider our current service partners. The plant also implies job security, if one includes other suppliers in terms of logistics, maintenance, cleaning, security and information technology services,” says Anderson.
Several trained engineers from Hyundai’s commercial vehicle division, in South Korea, assist with the local training and development of staff to ensure that best practices are followed during the assembly process. Thereafter, the Hyundai Training Centre at Hyundai Automotive SA’s head office, in Bedfordview, will be responsible for ongoing training.
Meanwhile, the Hyundai Training Academy is dedicated to training technicians, service advisers and sales persons regarding products, and development training for apprentices and learners.
“We produced the first trucks from the assembly plant in August. The local production of HD65 and HD72 trucks will give us a lot of momentum to increase our current 3% share in the medium-sized commercial vehicle market,” says Griffin.
“We are at an early stage in the development of the local operation, but we are examining the possibility of using more locally produced parts for our assembly line,” he concludes.