Hyundai Considers $1 Billion Polish Investment

09/25/96

Reuters has reported that South Korea's Hyundai is considering investing up to $1 billion in Poland over the next several years. Young Y. Hwang, managing director for Hyundai Corporation Europe GmbH, said Hyundai planned to invest in the machinery industry, the car industry, the construction industry, the production of bicycles and others, but gave no details.

"As far as heavy industry is concerned, the scale of our investment would be double digit million dollar figure . . . but when we are talking about the whole project it could be at least a billion dollars," Young told a news conference.

Jerzy Napiorkowski, the president of Universal, which has set up a joint venture with Hyundai to assemble its Accent cars also attended the press conference. He said his company still hoped to get a permit to import duty-free car parts: "we hope that after negotiations (with the industry ministry) the problem will be solved positively and we will get the license."

Hyundai's press conference came only a week after Hyundai's rival Daewoo wrote a letter to Poland's prime minister demanding that the Polish government reject the Hyundai-Universal application for a permit to import car-parts duty-free. Daewoo argued that Hyundai's investment in Poland was insubstantial and that the Polish government should protect companies that had made big investments, like itself. Daewoo threatened to pull out of its Polish investments if the government granted the permit to Hyundai. The industry ministry responded by voicing its support for Daewoo and announcing that Hyundai-Universal should not get the license. The ministry said the Hyundai-Universal venture does not fulfill the requirements of an assembly center.

Paul Dever -- The Auto Channel