Beijing Hyundai sells Chongqing plant

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【Summary】Beijing Hyundai is selling its Chongqing plant in China for $505 million, as it restructures its strategy due to intense competition and slowing demand. The plant, a joint venture with Beijing Automotive Group, started production in 2017 with a capacity of 300,000 units. Hyundai aims to optimize production and focus on profitability in China, where its sales have declined in recent years. Tesla was the only foreign brand to increase its market share in China during the first half of the year.

FutureCar Staff Sep 04, 2023 12:17 AM PT

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 challenging market conditions and declining 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 production capacity of 300,000 units. The decision to sell the plant is aimed at improving profitability and optimizing the operation of Hyundai's production lineups.

A spokesperson for Hyundai Motor stated that the company has been taking various measures to enhance its sales performance in China. However, no buyers or schedule for the sale have been determined yet.

This move comes after Hyundai announced its plans in June to restructure its China business and focus on profitability. The automaker had previously operated five plants in China but has already sold one of them this year. The company intends to eventually operate just two plants, which will be optimized for production and exports to emerging markets.

Hyundai, along with its affiliate Kia, has experienced a decline in vehicle sales in China in recent years, primarily due to the growing popularity of electric vehicles in the country. In contrast, Tesla has managed to increase its market share in China during the first half of the year, according to industry data.

China's passenger vehicle sales have been declining for the past two months, as a result of a price war and insufficient government incentives to stimulate consumer demand.

The sale of the Chongqing plant by Beijing Hyundai reflects the company's efforts to adapt to the changing dynamics of the Chinese auto market and improve its overall profitability.