Hyundai Motor to produce Genesis cars in Kazakhstan

Hyundai Motor Group will produce Genesis models from its knock-down (KD) plant in Kazakhstan to bolster the South Korean auto giant’s luxury marque’s brand awareness in the Central Asian country’s high-end car market dominated by its German and Japanese peers.

According to sources in the Korean auto industry on Monday, Astana Motors KMC recently completed the renovation of the Hyundai Trans Kazakhstan plant, a KD assembly plant running since April 2020, to produce Hyundai passenger cars. Astana Motors is part of a major auto group in Kazakhstan. 

Beknur Muratovich, Astana Motors KMC CEO, was quoted as saying in a letter sent to investors recently that the company has completed renovation of the Almaty plant to modernize its production lines and shipped out the first car produced from its test line there.

“The commercial production of Genesis' main models will begin this fall,” the CEO said, adding that the company is building Genesis showrooms in major cities such as Almaty, Shymkent and Astana, the capital of Kazakhstan.

The Hyundai Trans Kazakhstan plant located in the Almaty Industrial Zone, Almaty, will manufacture five Genesis models, including the G90 sedan but without electrified models, from the third quarter of this year.

The plant is a KD assembly plant with an annual production capacity of 45,000 units and is expected to churn out several hundred Genesis units a year.

With the production of Genesis cars from the local plant in Kazakhstan, Hyundai Motor hopes to shore up Genesis sales in the Central Asian country, where German and Japanese cars dominate the luxury car segment.

NO. 1 MASS MARKET BRAND

Hyundai Motor and its sibling Kia Corp. jointly commanded the car market in Kazakhstan with the largest share of 35% last year after selling 71,220 units. General Motors Co. was the runner-up with a 23% share.

Despite their strong position in the country’s overall car market, the Korean duo trailed far behind German and Japanese brands in its high-end car market. Genesis sold a mere six cars in the Central Asian country last year.

The plant in Almaty currently produces 11 Hyundai Motor models, including Sonata midsize sedans and Santa Fe sport utility vehicles.

The new Genesis line in the plant will be Hyundai’s first overseas KD plant to produce its luxury marque cars. The Korean carmaker operates about 30 KD plants across the globe, mostly in developing countries.

To discuss ways to improve Genesis' brand awareness in the Central Asian country, Hyundai Motor’s Chief Executive Officer Chang Jae-hoon visited the plant in Almaty in February.

WEAK BRAND AWARENESS IN EMERGING MARKETS

The Korean automaker also plans to aid in the construction of local plants for its Korean auto parts subcontractors near the plant in Almaty.

Hyundai Motor Group is also said to be considering producing Genesis models in India and Saudi Arabia amid dwindling demand for its cars in China and Russia.

Hyundai Motor’s Indian operation is the second-biggest carmaker behind Maruti Suzuki in the South Asian country, the world’s No. 3 auto market that also serves as the Korean carmaker’s Southeast Asian hub.

Hyundai Motor India is seeking to go public in India to ramp up its annual production capacity to 1 million units this year to meet growing demand for its cars, according to media reports. 

Genesis, once derided as a Lexus copycat, is evolving from a comfortable luxury car to a premium, high-performance vehicle. Its car sales outside Korea have increased from 18% of its entire sales to 31% in 2021, 37% in 2022 and 44% in 2023.

Its cars are especially popular in the US but its brand awareness is still weak in emerging markets, including India and other Asian countries, as well as Europe.

Write to Jin-Won Kim at jin1@hankyung.com

Sookyung Seo edited this article.