Hyundai Motor sells Chongqing plant for $505 million

author: FutureCar Staff    

Hyundai Motor is putting its Chongqing plant in China up for sale at a price of $505 million. This move comes as the Korean automaker adjusts its Chinese business strategy due to declining sales. The Changzhou plant will also be put up for sale within the year, reducing Hyundai's operational factories in China from five to two.

Beijing Hyundai, a joint venture between Hyundai Motor and Beijing Automotive Group, is selling the land use rights, equipment, and other facilities of its Chongqing plant. The exact details regarding the buyer and sale date have not been confirmed yet, according to a Hyundai spokesperson.

The decision to sell the Chongqing plant follows Hyundai's Chinese business reconstruction plan announced in June. The Chongqing plant had ceased operations a year ago. Previously, Hyundai Motor had five factories in China, but it sold off its No. 1 Beijing factory in 2021 and halted operations at the Chongqing and Changzhou plants.

The Chongqing plant, which began production in 2017, was capable of producing 300,000 units annually. However, Hyundai's sales in China have been severely impacted since 2016, when tensions between Korea and China escalated due to the deployment of the Terminal High Altitude Area Defense system. Consequently, Hyundai Motor and Kia's vehicle sales in China dropped from approximately 1.8 million in 2016 to 339,000 in the previous year.

In response to the decline in sales, Hyundai Motor plans to reduce its model lineups from 13 to 8, focusing on the premium and high-margin Genesis and SUVs. Additionally, Hyundai Steel, which supplies automotive steel plates to Hyundai and Kia, is also selling its two Chinese automotive steel plate facilities.

Looking ahead, Hyundai Motor is shifting its manufacturing base away from China and towards India and Indonesia. In July, Hyundai signed a deal with General Motors India to acquire its manufacturing facility in Talegaon, Maharashtra. This acquisition is expected to increase Hyundai's production capacity in India to 1 million units per year.

Hyundai Motor has been steadily expanding its sales in India, positioning itself as the second-largest automaker in the country, following Maruti Suzuki.

By Sarah Chea [[email protected]]

FutureCar Staff