RUSSELSHEIM, Germany -- Hyundai and Kia are strengthening the independence of their European operations and stressing brand separation.
The Korean brands' technical center in Rüsselsheim, Germany, has been spun off from Hyundai Motor in Korea. It is now a separate entity called Hyundai Motor Europe Technical Center.
"The independence of the technical center is a very important development for us," said Hans van Gent, head of product planning for Hyundai and Kia in Europe.
"It gives us the opportunity to respond to the challenges of the European market independent of the mother company in Korea," he said.
Van Gent said that while previously all decisions had to be made by the head of the company in Korea, Hyundai and Kia Europe now can act much faster and closer to the customer. Purchasing will continue to be coordinated from company headquarters in Korea.
Kia's KCV-III concept for a 2+2 convertible coupe built by Heuliez of France showed Kia aims to establish an identity as a sportier, youthful brand. The KCV-III was unveiled at the IAA in Frankfurt in 2003.
Hyundai's Sonata large-segment car, unveiled at the Paris auto show in September, was designed to express that the brand is "refined and confident."
Van Gent also said that the company is assigning engineers and designers to specific brands.
"In the past five years, integration was the main objective. We have created common platforms, powertrains, systems and suppliers," he said.
But now the companies -- parent Hyundai owns 60 percent of Kia -- have started a second phase, asking designers and engineers to distinguish the two brands' products "according to our newly defined brand values," van Gent said.
Hyundai's brand image is "refined and confident." Kia is defined as "exciting and enabling." It translates into making comfortable and elegant vehicles at Hyundai, while giving Kia cars a sportier and more robust design.
The first models to fully demonstrate the new, dual brand identity will come to market in 2008 and 2009. Both brands will have a wide range of products so customers will perceive them as full-line carmakers.
"Customers know our brands, but they don't know that we are a huge company with a full line of vehicles up to the luxury segment," van Gent said.
Nevertheless, the volume segment will have the highest priority, including inexpensive cars with which most customers still associate the brands.
"We have a good image in a segment that is served by few companies," said Hyundai spokesman Ralf Kaiser. "It would be a mistake to give up that selling edge, and we will fight to keep it."
Hyundai has also developed two diesel engine families for Europe.
Hyundai and Kia are adding capacity in Europe to deal with the envisioned growth. Starting in 2006, an assembly plant in Zilina, Slovakia, will produce the next generation of lower-medium segment models. The capacity of the plant is 300,000 units annually.
Hyundai also partly owns a plant in Turkey, which produces the H-1 van for Europe and the Accent and Lantra for Turkey, Africa, and Middle East markets. The plant has capacity of 60,000 units annually and will be expanded to produce cars for western Europe.
Both brands have ambitious targets for Europe.
By 2010, Hyundai and Kia want to sell a combined 1.5 million cars in Europe. Hyundai wants to sell 800,000 units in Europe by 2010. Kia wants to reach 700,000 units by 2010.