Beijing Hyundai sells Chongqing plant

author: FutureCar Staff    

Beijing Hyundai Motor is selling its Chongqing plant in China for a starting price of 3.68 billion yuan ($505 million) as part of its strategy to adapt to the competitive market and slowing demand. The sale includes the land use rights, equipment, and other facilities of the plant, which is a joint venture with Beijing Automotive Group Co.

The Chongqing plant, which began production in 2017, has an annual capacity of 300,000 units. In an effort to improve sales performance and profitability, Hyundai Motor has been implementing various measures and plans to optimize the operation of its production lineups.

As of now, the buyers and schedule for the sale have not been decided, according to a Hyundai Motor spokesperson. This move follows Hyundai's announcement in June to further restructure its China business and focus on profitability. The company had previously sold one of its five plants in China in 2021 and aims to operate just two plants in the future, optimizing production for exports to emerging markets.

Hyundai and its affiliate Kia have faced declining vehicle sales in China in recent years, mainly due to the shift towards electric vehicles. In contrast, Tesla was the only foreign brand to increase its market share in China during the first half of the year, according to industry data.

In July, China's passenger vehicle sales contracted for the second consecutive month, as a price war and government measures failed to incentivize consumers. The challenging market conditions have prompted Beijing Hyundai Motor to make strategic adjustments and seek opportunities for growth and profitability.

Source: Reuters

FutureCar Staff