Hyundai & Kia responsible for big positive impact on European economy

A report by economics consultants London Economics reveals the big positive impact Hyundai and Kia are having on the European economy.

We already know that both Hyundai and Kia are looking at 2013 more as an exercise in building their ’Brand’, rather than simply selling more and more credible cars.

‘Brand’ is often as much about perceptions as anything else, so if you can address any possible negatives for your brand, as well as producing cracking products, you’re on to a winner.

With the rise and rise of Hyundai, car buyers have come to see Hyundai and Kia as the equal of more established brands in Europe and not just the bargain basement maker from Korea. But perhaps one thing stands between Hyundai and its complete acceptance by European buyers – they’re not European.

In a global world, that shouldn’t be a real issue, but in a cash-strapped Europe the idea that a non-European car company is doing a ‘Starbucks’ and benefiting from its sales without contributing to the economy could be a negative.

So Hyundai commissioned an independent economics consulting firm – London Economics – to asses the impact on the European economy of Hyundai and Kia’s success story. And it’s overwhelmingly positive, even if you come to it with a cynical viewpoint.

As we reported last year when a mad French minister was throwing accusations at Hyundai about stealing jobs from France’s workforce, Hyundai and Kia really do contribute a huge amount to economies right across Europe, with more than half of all cars sold in Europe actually built here.

In the process of building and selling cars in Europe, Hyundai is investing heavily in a production infrastructure in the Czech Republic and Slovakia – which has a turnover of €6.5 billion and employs 7,345 staff –   purchases goods to the value of €4.8 billion (of which €3.2 billion is sourced in Europe), pays €1.7 billion in taxes (customs duties, sales and income taxes – although no mention of corporation tax), is responsible for 18,000 jobs in the supplier chain and as many as 61,000 in the upstream and downstream.

So even if many would rather see the sort of success Hyundai and Kia enjoy in Europe being pulled-off by a European company, there’s no denying that Hyundai has entrenched itself firmly in Europe by becoming a productive part of the economic landscape, not just a foreign interloper that takes the money and runs.

Allan Rushforth, Hyundai’s head in Europe, said:

Hyundai’s commitment to Europe – its people, its economy – is stronger than ever.  Our multi-billion Euro investment in the region has enhanced the quality of our products and services, and has brought new opportunities for those in employment directly and indirectly thanks to Hyundai.

We’ve built a business that can grow sustainably, bringing benefits to the European economy and to all those associated with Hyundai.  In 2013 we aim to consolidate our position and strengthen the fundamentals of our business through qualitative growth – enhancing Hyundai’s brand image, increasing customer satisfaction and maintaining our 3,5% market share.

We consider Hyundai to be a committed European carmaker, here for the long term.  We’re optimistic about the future for Hyundai and about Europe’s future too.  We’re driven by a passion to succeed – and we want Europe to succeed because our people and operations are at the heart of it.  It’s a region of strategic importance for Hyundai that will see further investment and focus.

So, that’s Hyundai and Kia’s main potential negatives addressed then.

Time to get back to flogging an ever increasing number of cars to European car buyers who are now properly on-side?

By Cars UK