Hyundai, Ulsan – The largest car factory in the world

With more than a quarter (11 million) of South Korea’s population of around 40 million living in the capital Seoul and a further 1.1 million living in the country’s capital of heavy industry Ulsan, it is clear the country’s population s centred on its bustling metropolises. But while space can be found at a premium in the largest cities, the businesses that operate in each of these cities take advantage of the synergies available due to the close proximity of the workforce and other related companies.

Hyundai Motors’ huge Ulsan vehicle manufacturing facility (purportedly the largest factory of its kind in the world) does just enjoying the benefits of employing 34,000 people from the local populous, equipping the factory with its own dock at one of the country’s largest container ports – even the massive transporter ships that deliver Hyundai produced vehicles to 120 countries worldwide are manufactured by a sister company at a shipyard literally around the corner from Hyundai plant. There are also close links to the country’s tyre manufacturers, with one of the firm’s three domestic tyre suppliers (Nexen – Hankook, Kumho and Nexen share virtually all OE supply between then) conveniently placed just over an hour away at Yansang, as Tyres & Accessories found out during a recent tour of Nexen’s production facilties.

Hyundai Motors takes T&A for a tour of its million car a year Ulsan flagship plant

Looking out the window of the Busan-bound flight from Seoul during its decent, you can also see a vehicle proving ground likely to belong to the Samsung-Renault plant in the vicinity of Busan, which is also around an hour away. So, with Nexen planning to increase its international OE and domestic market share (not mention aiming jump up between seven and ten places in the world rankings during the next five years – see separate article for more on this) the chance to see the largest car production plant in the world in action was a welcome opportunity.

Such is its scale, Hyundai’s Ulsan factory is not far off a town in its own right and with many of its internal roads designed to carry to lanes of traffic in either direction. The 34,000 workers at the site produce an enormous 1.53 million Hyundai, Genesis and Equus branded cars a year. When you consider that the company produces an 4.5 million units a year in total across six locations, as well as the fact the South Korean output is a maximum 1.86 million cars per annum, it is clear that the plant produces almost half of its output at this one factor and plays a central role in the company’s continuing success. Considering the fact that many of Hyundai’s most popular models (take the i30 for example, which has received positive reviews in the UK and shot up the registrations league tables since the introduction of the scrappage scheme) include full-size spare tyres, this means the company’s tyre suppliers need to deliver around 7.65 million units a year between them – just to keep the cars produced in the Ulsan plant rolling.

Ulsan produces one car every 13 seconds across the five sub-plants on-site and it takes around five hours to assemble one Ellantra model, for example. Finishing a vehicle like this means the construction of 20,000 components most of which are supplied externally. That said engines, transmissions and bodies are made in-house. Speaking of in house development, Hyundai may not be the biggest selling brand in Europe at the moment, but did you know the company has been exporting its transmissions technology since 1991. In addition an engine development cooperation agreement in 2002 saw the company lead Mitsubishi and Daimler Chrysler engineers in the development of the “theta” engine was subsequently supplied to these companies – all of which demonstrates that the Hyundai’s size and scale means the company is growing in the scale of direct and indirect influence it has on the market and the opportunities it can offer OE tyre suppliers.

In addition to the Ulsan plant, Hyundai operates factories in key markets around the world including: Alabama (US, 196,000 units); India (560,000 units); China (600,000 units); plus sites in the Czech Republic (currently producing 300,000 cars a year and Russia (150,000 units). The latest addition was the company’s second factory in China, which was completed at the end of 2010.

Hyundai Motor Company began building its third plant in China on 28 November with the goal of reaching a million unit a year total capacity by 2012. Beijing Hyundai Motor Company (BHMC), a 50-50 joint venture between Hyundai Motor and Beijing Automotive Industry Holding Co., held a ground-breaking ceremony for a 400,000 unit/year plant on 28 November in Shunyi District, Beijing. The new plant is scheduled to be completed by July 2012. The two existing plants roll out up to 300,000 units each.

BHMC expects this year’s sales to exceed its target of 690,000 which is already beyond its annual capacity of 600,000, while cumulative sales may surpass 2.5 million units. The plant will be built on a 1.6 million m2 site, while the plant will have a floor space of 300,000 m2, featuring vehicle production facilities such as stamping, welding, painting, assembly and module lines, as well as engine production facilities.