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. Additionally, the Changzhou plant will also be put up for sale within the year, reducing Hyundai's total number of operational factories in China from five to two.

Beijing Hyundai, a joint venture with 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 yet been confirmed, according to a Hyundai spokesperson.

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

The Chongqing plant, which began production in 2017, was a joint venture with Beijing Automotive Group and had an annual production capacity of 300,000 units. However, Hyundai's sales in China have plummeted in recent years, particularly after tensions between Korea and China escalated in 2016 due to the deployment of the Terminal High Altitude Area Defense system (Thaad) on Korean soil.

As a result of the declining sales, Hyundai Motor plans to reduce the number of model lineups from 13 to 8, allowing the company to focus on the premium and high-margin Genesis and SUVs. In addition to the plant sale, 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 from China to India and Indonesia. In July, the company signed a deal with General Motors India to acquire its manufacturing facility in Talegaon, Maharashtra. This acquisition will increase Hyundai's production capacity in India to 1 million, as the Talegaon plant has an annual production capacity of 130,000.

Hyundai Motor has been steadily expanding its sales in India in recent years, positioning itself just behind the market leader, Maruti Suzuki.

By Sarah Chea [[email protected]]

FutureCar Staff