Logo of Phnom Penh Post newspaper Phnom Penh Post - Hyundai to delay parts plant, open showroom

Hyundai to delay parts plant, open showroom

Hyundai to delay parts plant, open showroom

The announcement follows official visit from Hyundai boss to gain support for new factory

South Korea's Hyundai Motors said it is delaying construction of a parts assembly plant in Cambodia after the company's vice chairman, Choi Han Young, met Prime Minister Hun Sen and National Assembly President Heng Samrin to drum up support for the venture.

Jason Sun, director of Star Motors (Cambodia) - the authorised local Hyundai distributor - said that the plans would have to be delayed because of the global financial crisis, which has seen automobile demand nosedive around the world, including in Cambodia.

However, he said Hyundai still planned to go ahead with a new Hyundai showroom in Phnom Penh to increase the company's presence.

"Cambodia is a small market, but the standard of living is rising, and there is lots of potential," he said.

The showroom, located on Russian Boulevard, has already been built and will be launched "in a few weeks", Sun added.

Choi met Hun Sen on Tuesday and Heng Samrin Wednesday, and an application for the parts assembly plant is currently being considered by the authorities.

"We have submitted our investment proposal to the council for the development in Cambodia already, but there is no approval yet," said Sun, declining to reveal the investment cost, the location and when construction will begin.

"I received the investment proposal for [Hyundai's assembly plant]," Sok Chenda, secretary general for the Council for the Development of Cambodia, said Thursday. He declined to reveal the details of the proposal.

Tough market

Around 300 Hyundai vehicles are currently sold each year in Cambodia, but the company is entering a tough market, with all car companies reporting weak sales on the economic slowdown.

Kong Nuon, president of TTHK Co Ltd, Cambodia's only Toyota distributor, forecast that auto sales would drop 40 percent within the next two years due to the economic crisis and the real estate downturn.

He added that 2,800 new cars were typically sold in Cambodia each year, and about 20,000 secondhand automobiles changed hands. Sales of new cars were shared between around six automobile importers: Toyota, Ford, Mitsubishi, Nissan, Mercedes and Ssangyong, he said.

In a related development, the local partner in a joint venture Yamaha motorcycle manufacturing facility in Phnom Penh told the Post Monday that construction had also been delayed as a result of the global economic crisis.

Kong Nuon, who is also president of Kong Nuon Import & Export, added that planned capacity had been scaled back between 30 and 40 percent from 30,000 motorcycles in the first year.

Globally, Hyundai has fared better than other car companies. Bloomberg reported the Seoul-based company saw US sales jump 14 percent from a year earlier in January, while industry-wide sales fell 37 percent. 

MOST VIEWED

  • Chinese influx pushing locals, Westerners out of Preah Sihanouk

    Some within the Kingdom’s tourism industry have speculated that the recent influx of Chinese visitors may hinder domestic tourism as the price of accommodations in the coastal city of Sihanoukville continues to rise. Preah Sihanouk province, which has become a hotbed for Chinese investment

  • ‘Dire consequences’ from sanctions, warns AmCham

    American businesspeople in Cambodia have warned that any sanction against the Kingdom would have “dire consequences” that could push Cambodia even further into the arms of China. In a letter to US senators and representatives dated Monday, the American Chamber of Commerce Cambodia (AmCham) said

  • CPP: ‘Behave or Sokha suffers’

    The ruling Cambodian People’s Party (CPP) spokesman warned Kem Monovithya on Thursday that her attempt to damage “national reputation and prestige” would lead to her father, Kem Sokha, receiving even harsher punishment. Sok Eysan issued the warning as Monovithya, who is the court dissolved

  • Preah Sihanouk beach developments halted

    After receiving an order from Hun Sen, Minister of Land Management Chea Sophara led a team of experts and relevant officials to Sihanoukville to call a halt to the illegal development of a beach. The prime minister ordered the Prek Treng beach in Otres commune