Fleet News

Backroom moves will cut costs

HYUNDAI and Kia Motors are continuing to integrate in a bid to cut behind-the-scenes costs which is set to benefit both companies as they plan to launch a string of new models in the coming months. Hyundai acquired its ailing Korean rival in an international auction last year and work is on-going to maximise synergies between the two companies.

That will see the companies' 24 vehicle platforms reduced to seven, joint component purchasing, platform sharing and integrated manufacturing and engineering resulting in massive cost reductions. At the Frankfurt International Motor Show Hyundai president and chief executive officer Kye-Ahn Lee said Hyundai Motor Company had largely been unaffected by the Asian financial crisis which had impacted on Kia and, consequently, had continued to invest.

By the end of this year Hyundai Motor Company will be spun off as a separate company with Hyundai's other business, such as shipbuilding and electronics, following a similar restructuring route by 2002. The two manufacturers' distribution networks will continue unchanged, with a spokesman saying: 'There will be a significant merging of behind-the-scenes operations which will result in cost savings and efficiencies but customer-facing operations will be separate.

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