Hyundai Motor's Turkey Plant to Start i20 Hybrid Production in Q4
Next Year, B-Segment SUV New Model Also to Produce Hybrid
Turkey Plant's Annual Capacity 200,000 Units, Dropped to 170,000 Last Year
Strengthening Eco-Friendly Line to Secure European Eco-Car Export Volume
[Asia Economy Reporter Su-yeon Woo] Hyundai Motor Company has decided to urgently introduce hybrid models to revive its Turkey plant, which has recently been facing difficulties both internally and externally. Along with the start of i20 hybrid production by the end of this year, a new B-segment sport utility vehicle (SUV) hybrid model is also scheduled to be produced next year.
According to the automotive industry and foreign media on the 28th, Hyundai Motor Turkey plans to produce the i20 hybrid model at its local Izmit plant starting from the fourth quarter of this year. The Turkey plant currently produces only internal combustion engine vehicles, and the hybrid version of the i20 model, which accounts for more than half of total production, will become the first eco-friendly vehicle produced at the plant once launched.
Furthermore, the Turkey plant plans to equip the new B-segment compact SUV, which will begin production in the first quarter of 2021, with a hybrid engine. This is in preparation for the increased demand for eco-friendly vehicles in Europe, the main export market of the Turkey plant, due to stricter emission regulations starting this year.
Located in Izmit, northwestern Turkey, Hyundai Motor Turkey plant has an annual production capacity of 200,000 units and has consistently maintained production above 200,000 units each year. However, due to the recent economic crisis caused by political instability in Turkey, the domestic market has rapidly contracted, and last year's production volume sharply dropped to around 170,000 units.
Domestic production volume for Turkey, which exceeded 25,000 units until 2015, shrank to about 7,300 units last year, falling below 10,000 units. The main export market, Europe, also saw a decline in internal combustion engine vehicle exports due to the paradigm shift toward eco-friendly vehicles.
Global automakers such as Toyota, Renault, and Ford are already producing hybrid vehicles locally in Turkey. If Hyundai Motor's Izmit plant adds the i20 hybrid model, it will become the fourth plant producing eco-friendly hybrid models in Turkey.
An industry insider said, "For the Turkey plant, which is struggling in the domestic market, securing export volumes of eco-friendly vehicles to Europe is the most important factor to overcome the slump," adding, "The introduction of the i20 hybrid and the new eco-friendly SUV will be an opportunity to increase the operating rate of the Turkey plant again."
Starting this year, Europe has implemented a plan to reduce the carbon dioxide (CO2) emissions of newly sold passenger cars from about 130g/km per vehicle to 95g/km. Automakers that fail to meet this standard will be fined per vehicle based on CO2 emissions and sales volume. In other words, automakers must increase the proportion of eco-friendly vehicle sales.
Accordingly, Hyundai-Kia Motors plans to increase the share of eco-friendly vehicles such as electric vehicles, hybrids, and plug-in hybrids in the European market this year. The sales targets set by Hyundai and Kia for the European market this year are 558,000 units and 498,000 units (wholesale basis), respectively, which are somewhat conservative compared to last year. While the target volume has decreased, the plan is to aggressively increase the share of eco-friendly vehicle sales.
Hyundai plans to add eco-friendly new models such as the i20 hybrid, and Kia aims to raise the electric vehicle sales share from 3% last year to 9% this year, targeting to fill 24% of total European market sales with eco-friendly vehicles this year.
In the long term, Hyundai-Kia Motors will strengthen its global eco-friendly vehicle lineup focusing on advanced markets such as the United States and Europe, where infrastructure is established. The eco-friendly vehicle lineup, which was about 24 models last year, will expand to a total of 44 models by 2025, including 13 hybrid models, 6 plug-in hybrids, 23 electric vehicles, and 2 hydrogen fuel cell vehicles.
Researcher Woo-jung Yoo from Ebest Investment & Securities said, "From this year, Hyundai Motor Group's eco-friendly vehicle strategy in Europe seems to focus on local production," adding, "With the introduction of an electric vehicle platform next year, the proportion of pure electric vehicles will further increase, and overall eco-friendly vehicle sales are expected to grow."
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