Hyundai to Expand Commercial Vehicle Business

?Frost & Sullivan predicts that from 2014 to 2022, 18% of HMG’s CV incremental annual sales will come from Europe and N. America, while 76% will derive from China, the Association of Southeast Asian Nations, the Middle East and South America

In an effort to raise sales and profitability, Hyundai Motor Group (HMG), which is comprised of twin brands Hyundai and Kia, has recently announced plans to invest manpower and resources towards shaping its Commercial Vehicle (CV) arm into a competitive force in the truck & bus market. 

HMG reportedly plans to spend around $1.8 billion over the next five years on light, medium and heavy duty truck and bus offerings, with the intention of penetrating the U.S. market to catch up with rivals in a globally competitive landscape as they currently sit as the world's #5 automaker. 

After China, the U.S. is Hyundai's 2nd largest overseas market, and in order to strengthen their feeble CV business there analysts are saying an annual production capacity of 10 million vehicles is necessary, from about 8 million currently. 

Hyundai has already managed to fashion its Passenger Car (PC) business into a world-class brand, with the Hyundai Elantra closing in on the Toyota Corolla as being one of the top-selling cars of all time over the last few years. 

Just as it did with its PC business, HMG plans on strengthening its CV business by taking a regional approach to product development, where it will leverage South Korea's domestic market as its global design & production hub.

The South Korean automaker said it plans on bolstering annual production capacity at their factory in Jeonju by 54%, from 65,000 commercial vehicles to 100,000 by the year 2020.

“Although HMG is a relatively unknown force in the CV market, strong brand value, combined with design and feature-addition marketing strategies will catalyze HMG’s growth in the global CV market,” said Frost & Sullivan Automotive & Transportation Analyst Silpa Paul. 

“In regions like the Middle East and Africa, the establishment of high-quality completely-knocked-down and semi-knocked down assembly partnerships will also aid swift business expansion."