Chongqing plant for sale

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【Summary】Beijing Hyundai is selling its Chongqing plant in China for $505 million, as it restructures its strategy amid tough 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 plans to focus on profitability and operate just two plants in China, optimizing production for exports to emerging markets.

FutureCar Staff Aug 31, 2023 5:32 PM 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 adjust to the competitive market and slowing demand. The sale includes the land use rights, equipment, and other facilities associated with the plant. The joint venture with Beijing Automotive Group Co began production in 2017 with an annual capacity of 300,000 units.

A spokesperson for Hyundai Motor stated that the company has been implementing various measures to improve sales performance in China and intends to enhance profitability by optimizing its production lineups. However, no buyers or schedule for the sale have been decided yet.

This decision to sell the Chongqing plant follows Hyundai's announcement in June to further restructure its China business to prioritize profitability. Previously, Hyundai had five plants in China, but it sold one in 2021. The company plans to eventually operate only two plants, focusing on optimizing production and exporting to emerging markets.

Both Hyundai and its affiliate Kia have experienced a decline in vehicle sales in China in recent years, mainly due to the increasing popularity of electric vehicles. In contrast, Tesla, a foreign brand, managed to increase its market share in China during the first half of the year.

In July, China's passenger vehicle sales contracted for the second consecutive month, as a result of a price war and insufficient government incentives to stimulate consumer demand.

Source: Reuters