ST.PETERSBURG, Russia (AP) -- South Korea's Hyundai Motor Co. opened its first plant in Russia on Tuesday, a facility outside St. Petersburg that will produce as many as 150,000 cars a year.
Russian Prime Minister Vladimir Putin and Hyundai's Chairman Chung Mong-koo inaugurated the plant outside the country's second-largest city and took a brief ride in a sedan it will manufacture.
South Korea's largest automaker has invested about euro500 million ($654 million) in the facility that will have the highest share of locally produced components among the foreign carmakers in Russia. Several Korean companies have opened plants in a nearby industrial park to produce components for Hyundai's venture.
"It's the first full-cycle foreign auto plant in Russia," Chung said at the opening ceremony.
The global economic downturn halved car sales in Russia in 2009 -- the sharpest decline of any major market.
In an effort to spur sales, the Russian government in March started a scrappage scheme similar to the cash-for-clunkers programs that boosted sales across Europe and the United States in 2009.
Sales in Russia have jumped 14 percent this year, prompting the government to set aside 14 billion rubles ($452 million) to extend the program into 2011. Russian sales in August were Europe's second-largest after Germany's.
Putin, who has urged foreign automakers to produce a larger number of components in Russia, praised Hyundai for its contribution to Russia's modernization. "That will help transfer modern technologies and create new well-paid jobs," he said during the opening.
The plant will produce a small sedan and, later, a hatchback optimized for the local market. It will be capable of producing 105,000 cars in its first year of operation before reaching its full capacity of 150,000.
Putin also visited a new plant of Hyundai's supplier, Magna International Inc. which opened three production facilities outside St. Petersburg on Tuesday to supply Hyundai as well as other foreign car makers operating in Russia such as General Motors, Ford, Nissan and Volkswagen.
Magna currently operates five production sites in Russia.
Russian Prime Minister Vladimir Putin and Hyundai's Chairman Chung Mong-koo inaugurated the plant outside the country's second-largest city and took a brief ride in a sedan it will manufacture.
South Korea's largest automaker has invested about euro500 million ($654 million) in the facility that will have the highest share of locally produced components among the foreign carmakers in Russia. Several Korean companies have opened plants in a nearby industrial park to produce components for Hyundai's venture.
"It's the first full-cycle foreign auto plant in Russia," Chung said at the opening ceremony.
The global economic downturn halved car sales in Russia in 2009 -- the sharpest decline of any major market.
In an effort to spur sales, the Russian government in March started a scrappage scheme similar to the cash-for-clunkers programs that boosted sales across Europe and the United States in 2009.
Sales in Russia have jumped 14 percent this year, prompting the government to set aside 14 billion rubles ($452 million) to extend the program into 2011. Russian sales in August were Europe's second-largest after Germany's.
Putin, who has urged foreign automakers to produce a larger number of components in Russia, praised Hyundai for its contribution to Russia's modernization. "That will help transfer modern technologies and create new well-paid jobs," he said during the opening.
The plant will produce a small sedan and, later, a hatchback optimized for the local market. It will be capable of producing 105,000 cars in its first year of operation before reaching its full capacity of 150,000.
Putin also visited a new plant of Hyundai's supplier, Magna International Inc. which opened three production facilities outside St. Petersburg on Tuesday to supply Hyundai as well as other foreign car makers operating in Russia such as General Motors, Ford, Nissan and Volkswagen.
Magna currently operates five production sites in Russia.
