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Hyundai Motor plant to shorten development time

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SEOUL, Thurs: Hyundai Motor Co, South Korea’s largest carmaker, will open a new facility next month that will allow it to cut the two years it takes to develop new models.

Its shares surged to a record high.

Hyundai Motor will open its second so-called “pilot production facility” near its research centre in Namyang, 48km south-west of here.

The new facility, which is more advanced than the first built in 2002, will conduct tests and find defects in models at the development stage, Seoul-based Hyundai Motor said today.

“The new facility will help reduce the new model development time from the current 24 months,” Jake Jang, a spokesman for the carmaker said in an interview by phone. He did not give details.

The facility will shorten the time to come up with a new model to 18 months, the Korea Economic Daily said today, citing an unidentified company official.

Hyundai Motor’s chairman Chung Mong-koo has been focused on making quality cars and erasing the price premium of Toyota MotorCorp, the world’s second- largest carmaker.

Japanese carmakers like Toyota and Honda Motor Co take 18 months to develop a new car, while it takes 38 months for US and European carmakers, said Kim Hagju, a car analyst at Samsung Securities Co here.

“The facility will allow Hyundai Motor and Kia to respond more flexibly to rapidly changing customer needs and produce more hit models,” said Kim, who recommends investors buy Hyundai Motor shares. “This is the same way Japanese carmakers created their leading edge.”

Hyundai and its affiliate, Kia Motors Corp, are seeking to become one of the world’s top five carmakers by 2010, producing five million cars by that time.

Shares of Hyundai Motor rose 2.2 per cent to close at a record high of 80,300 won.

The shares have surged 45 per cent this year compared with a 31 per cent rise in the main Kospi stock index. — Bloomberg

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