MOBIS will provide 42 of the value of a car

The Korean Group Hyundai-Kia chose the Slovakia to install its first European plant. If, at first blush, the town of Zilina appears a little eccentric, or even lost in the extreme north of the country and surrounded by reliefs, this choice owes nothing to chance. Indeed, on the one hand, largesse granted by local, regional and national authorities to reach the ceiling of 15 of the total amount of project aid without problem. On the other hand, the proximity with the Poland allows, theoretically, to have access to the pool of suppliers sites Fiat of Bielsko-Biala and Tychy. An opportunity that few suppliers will have the opportunity to seize, because Kia implements its own Korean suppliers around its plant. Third point, Hyundai will implement Novosice, Czech Republic, a site for the production of a capacity of 300,000 units also. Thus, within a radius of less than 40 km will focus the European strength of the Hyundai group: two sites of Assembly of 300,000 units each, site engines and gearboxes for 600,000 vehicles per year and assigned equipment suppliers of the group, Mobis including.

Three families of vehicles

In the spring of 2006, Kia is fully functional with its buildings and its brand new machines. The site spans 223 hectares comprising the actual Assembly site, test track, parking lots of shipping and the supplier park. Note also that it remains enough room on the ground for other activities. The two waves of pre-sets are scheduled for early September and late October. The start of the production of the new ED, segment M1 alternate of the Cerato, is scheduled for the month of December 2006. Production will gradually rise: 150,000 units in 2007, 225,000 in 2008 and 300,000 in 2009. In late 2007, four variants will be produced in Zilina, three ED (five-door end 2006, break from September 2007 and three doors end of 2007), and the Sportage from June 2007. Another vehicle will be added to the ED and the Sportage, 2008. The site of Zilina is the cornerstone of the strategy of Kia in Europe. It is to sell 500,000 cars against 300,000 currently on horizon 2009. This half will run as follows: 300,000 will be manufactured in Slovakia and 200,000 will come from Korea. By 2012, Kia is the 2.5 million units, or a production capacity double of what it currently is.

A highly automated production

This is not because labor is cheap in Slovakia Kia uses it extensively. On the contrary, the Kia is all all automated as a site of Western Europe. About 17,000 m2, stamping workshop includes two lines of automated presses, and a system capable of handling up to 6500 items robotic storage. A system of automatic air conveyor carries elements stampings stamping shop to an Assembly. He has 310 robots to ensure 100 of the welding operations. The Assembly shop is designed to produce seven different cases. Then, they are routed to the workshop of painting on 30.000 m2, designed by ABB. At the stage of the Assembly, the workstations are variable height operations to perform. At full capacity, the site will have 3,000 people. It will then work in three shifts. The passage of two to three teams is expected at the end of the year 2007. If we stick to the only calculation of productivity measured in number of vehicles manufactured by employee, Kia is the record level of 100, far before the number one current Nissan Sunderland.

About 31,000 m2, the engine production unit located on the supplier park is also highly automated, both in its process of manufacturing in the stage of quality control for 100 of the engines. The launch of production of the gasoline engine is planned for February 2007 and diesel will be manufactured from May 2007. Here also, Kia is surrounded by a few key for the European market suppliers: Bosch injection diesel, Thyssen for crankshaft and Lauterbach for the cylinder block.

"Made in Slovakia" by Korean companies

Among the equipment on site, Mobis will manufacture many systems and assemble modules for Kia. The integrated OEM of the Group invested EUR 130 million on the site of Zilina. MOBIS will provide 42 of the value of a car. This figure includes the drivetrain which is assembled by Mobis (1) and sent in Kia at the stage of the Assembly of mechanical components. The steelmaker Hysco manufacture sheets of steel and has, for its part, invested 30 billion won (EUR 25 million) to Zilina. Remember that Kia is the second shareholder of Hysco with 14 of the capital. The Chairman of Hyundai-Kia also long owned 10 of the capital of Hysco. The logistician Glovis, subsidiary of Hyundai, is installed to Zilina and there has even established its European headquarters. Apart from Visteon, which is located in Slovakia for manufacturing systems of conditioning and Michelin who chose, insistent Kia Europe and its Chairman request, Jean-Charles Lievens, anxious not to disrupt the launch of the mark in Europe by stupid problems of tyres. Thus, the mark estimated that 75 of the parts that will come in the Kia manufactured in Zilina will come from Europe and the remaining 25 will come from Korea. As indicated above, these parts "made in Europe" are from predominantly Korean companies. The choice from Michelin to provide tyres demonstrated the willingness of any risk with Korean tyres. "Michelin, it is a long battle that I have won," says Jean-Charles Lievens, Senior Vice President Kia Motors Europe. The recall of the European content of vehicles that are manufactured to Zilina underscores the concern of Kia who intends to become "more Korean European manufacturers. Beyond the own exaggerated any ceremony at which attended many Korean executives, noted, more seriously, that Kia is resolutely for the European market. The Group has an impressive technical centre at Rüsselsheim in Germany. It is adaptation, deeply if necessary, the vehicles to European tastes and develop diesel engines.

Diversity, identical costs more

Moreover, production in Europe for the European market will allow Kia to enrich its offer many variants and options, which was not the case so far. Indeed, with three weeks of boat for the manufactured cars in Korea, it is difficult to make the production by the client. Historically, this constraint reduces diversity and concentrated production on the readily saleable definitions. Now, Kia will better able to adapt to European tastes. This would mean on the ED by 90 different variants from three bodies, three engines petrol, three engine diesel, three gearboxes, three indoor environments and twelve colors of body, without forget the versions with the direction to the right.

With respect to production costs, the cars sold in Europe and produced in ilina will be "at the same cost than what we currently come from Korea" indicates In - Kyu Bae, President & CEO of Kia Motors Slovakia. The disappearance of 10 of customs duties and the gain on transport is absorbed by the financial depreciation of the new Slovak facilities. "In the end, there is very little cost variance" adds Jean-Charles Lievens also said future gain on currency stability.

(1) In this case, Mobis receives the engine and the box in Kia, assembles them with the clutch to form GMP and sends the complete set for Kia.

BOX .

Hyundai in Czech Republic in 2008

Hyundai will produce vehicles in Czech Republic in 2008 in Nosovice, 80 km from the Kia in Zilina. The two sites will be powered by the same factories of engines and gear boxes, and can easily share the same equipment.

In Europe, sales of the Hyundai group, with its two brands, are strongly for five years. During this period, the volumes have doubled and the group now represents 3.5 of the European market. With an annual capacity of 600,000 vehicles, two European sites will enable the Korean manufacturer to settle permanently in Europe. Hyundai has the ambition to be the sixth largest manufacturers in 2010.