Hyundai happy to go solo

HYUNDAI Motor Co. is standing firm amid the turmoil surrounding DaimlerChrysler AG’s Asian operations, vowing to go it alone on joint-venture projects should the German auto giant sell its 10.5 per cent stake in the South Korean manufacturer.

Indications from HMC management in Seoul this week are that a business proposal on the alliance, in which Mitsubishi Motors is a large component, is under consideration and that an announcement on its future would come soon.

"There’s been a lot of speculative reports and we have refused to comment so far, but I will say this: We have the technological and financial resources to proceed in commercial vehicles and passenger cars without Chrysler," HMC director of global public relations Oles Gadacz told GoAuto.

"We also can proceed with them on projects if it’s a win-win proposition." These projects include a 50/50 joint-venture forged with DaimlerChrysler in 2000 – and now in some doubt – to produce commercial vehicles, and a three-way venture established with DaimlerChrysler and Mitsubishi Motors in 2002 to design, develop and engineer a new family of four-cylinder petrol engines.

Hyundai’s NF Sonata released later this year will have the first of these so-called Theta engines.

"We’re one of the world’s most profitable car-makers, we’re not burdened by excessive debts, our credit rating is constantly being improved, our financial performance is very solid – so we do approach the relationship with Daimler from a point of strength. As an equal. We’re not on our knees with them," Mr Gadacz said.

"If it’s a win-win proposition, we’ll go ahead with a business proposal. If it’s not, clearly we’ll retreat. (But) certainly, the environment has changed greatly over the last four years." Mr Gadacz was speaking to GoAuto during an Australian media trip to South Korea which included sampling the company’s fuel cell technology and driving the new Tucson compact SUV, which goes on sale in Australia in the third quarter of 2004.

There was no comment on whether HMC is pursuing new opportunities with Mitsubishi Motors after DaimlerChrysler’s recent decision to stop bankrolling its embattled Japanese affiliate.

"That is strictly a bilateral thing and it doesn’t involve us. As far as we’re concerned, we were involved with them in a three-way engine alliance that’s on schedule and is not affected by recent developments," Mr Gadacz said.

"Those production plans are firmly in place – we, indeed, have started already making the engine and Mitsubishi, so far as we understand, has scheduled to begin later this year or next year. So that project was worked out swimmingly well." Notwithstanding HMC’s strong negotiating position, continuing speculation over whether DaimlerChrysler will sever ties with the South Korean to cover losses suffered with Mitsubishi has made its presence felt on the stock market.

The Korean Times reported recently that Hyundai Motor’s share price fell on the South Korean Stock Exchange and dropped below the 50,000 won level for the first time in almost a month.

In 2003 HMC sold almost two million vehicles worldwide and its affiliate Kia Motors sold 912,000.

HMC has forecast 17.6 per cent growth in 2004, which would raise its combined sales to 3.36 million and keep it on course, it is claimed, to achieve a top-five global sales position by 2010.

DaimlerChrysler currently sits in fifth position with 4.54 million sales in 2002.