Global Finance Investment Decision

Established in 1967, Hyundai Motor Group, previously known as Hyundai Motor Co., is ranked as the world’s fifth-largest automaker and includes more than two dozen auto-related affiliates and subsidiaries (Alex, 2010). With six manufacturing bases outside of South Korea, the company sold approximately 3.6 million vehicles in 186 countries.

The new manufacturing plant located in Piracicaba, Sao Paulo state, was recently launched at a cost of 600 million USD and is expected to produce more than 150,000 units a year. The company is targeting 10% of Brazilian car sales as a way of increasing its strategic logistics base in both Central and South America. In 2010 alone, the company was able to reach a market share of 3%, but with the opening of the new factory, this is likely to increase and possibly overtake Ford Motor Company’s dominance in the region. The company has recently released a new model dubbed the HB20 (Davidson, 2012).

This model was not only designed and adapted for Brazil, but will also be the first model to be fully produced in the new plant. It is the company’s first flex-fuel car and has features that will satisfy the Brazilian customer. The new model is expected to increase to 90,000 units in 2013 within the region as well as overseas. To date, the new plant has received more than 3,000 orders for the new model, which is above initial expectations. The new plant aims to achieve these results by focusing on three major areas i.e.

implementing a thorough and vigorous quality management for the new models, improving customer satisfaction as well as reinforcing its core strengths in order to gain a competitive edge over other auto-makers. This is aimed at increasing the company’s sales which has been reducing due to the previous global financial crisis.