Hyundai Motor's Chongqing Plant for Sale at $505M

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 tries to navigate its Chinese business amidst declining sales. Additionally, the company plans to sell its Changzhou plant within the year, reducing its total number of operational factories in China from five to two.

The sale of the Chongqing plant includes the land use rights, equipment, and other facilities belonging to Beijing Hyundai. However, details about the buyer and date of the sale have not yet been confirmed, according to a Hyundai spokesperson.

This announcement follows Hyundai's Chinese business reconstruction plan, which was revealed in June. The Chongqing plant had ceased operations a year ago, and Hyundai had previously sold off its No. 1 Beijing factory in 2021.

The decision to sell the Chongqing plant is a result of Hyundai's declining sales in China, particularly after 2016 when tensions between Korea and China escalated due to the deployment of the Terminal High Altitude Area Defense system (Thaad) on Korean soil.

In 2016, Hyundai Motor and Kia sold approximately 1.8 million vehicles in China. However, this number dropped to 909,000 in 2019 and further decreased to 339,000 in the following year. As a result, Hyundai plans to reduce its number of model lineups from 13 to eight, allowing the company to focus on premium and high-margin vehicles such as Genesis and SUVs.

In addition to the Chongqing plant, Hyundai Steel, which supplies automotive steel plates to Hyundai and Kia, is also selling its two Chinese automotive steel plate facilities. As Hyundai looks to replace China as its manufacturing base, the company is now turning its attention to India and Indonesia.

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

Overall, Hyundai Motor's decision to sell its Chongqing plant and focus on other markets reflects its efforts to adapt to changing business conditions and seek new opportunities for growth.

Source: JoongAng Daily

FutureCar Staff