Tuesday, 28 August 2012
PSA’s and Renault’s sales have collapsed in France while Hyundai and Kia have flourished. Hyundai Europe CEO Allan Rushforth pointed out that the company was doing well because of quality and price. “The success of Hyundai in Europe is based on products designed, engineered and built in Europe. Our most popular, and fuel-efficient, models sold in France are built in the Czech Republic and Turkey. In fact, nearly 90 percent of the Hyundai cars registered in Europe during the first half of 2012 were built outside Korea.”
It is a Europe-wide problem created by trade unions inflating car-makers’ wage bills. At Ford’s Saarlouis factory workers get about €480 ($600) to make each Focus. That compares with €207 for the Hyundai i30 at its Czech plant near Nosovice. This allows Hyundai to offer the i30 at €15,990, €960 below the cheapest Focus. Discounting in Europe makes things worse. Ford European sales dropped nearly 10 percent to 532,819 in the first half of the year, while Hyundai grew 12 percent to 232,454, and Kia jumped 25 percent to 173,232.
It takes Hyundai 19.5 man-hours to build a car in Nosovice. Ford is faster, at around 11 hours, but that is not enough to offset German labour costs, at €43.85 per hour, four times the €10.62 rate for workers in the Czech Republic, according to Automotive News Europe. Alongside the Nosovice plant the company has built a factory producing 600,000 transmissions a year. Kia 56kms (35 miles) away in Zilina, Slovakia, makes the same number of engines. Trucks shuttle between them, transmissions one way, engines in return.
Industry Minister Arnaud Montebourg, to say nothing of Renault and Peugeot-Citroën, could never keep up. Peugeot may be over the hill.