Hyundai Motor's Chongqing Plant Listed 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 tries to navigate its Chinese business amidst declining sales. The company also plans to sell its Changzhou plant within the year, which will reduce 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. However, details about the buyer and the date of the sale have not been confirmed yet, according to a spokesperson from Hyundai Motor.

This decision follows Hyundai's announcement of its Chinese business reconstruction plan in June. The Chongqing plant has been non-operational for a year now. Previously, Hyundai had five factories in China, three in Beijing, one in Chongqing, and one in Changzhou. The No. 1 Beijing factory was sold off in 2021, and operations were halted at the Chongqing and Changzhou plants.

The Chongqing plant, which is a joint venture with Beijing Automotive Group, started production in 2017 with an annual capacity of 300,000 units. However, Hyundai's sales in China have plummeted, especially since 2016 when tensions between Korea and China escalated due to the deployment of the Terminal High Altitude Area Defense system (Thaad) in Korea.

As part of its restructuring efforts, Hyundai plans to reduce the number of model lineups from 13 to 8. This will allow the company to focus on its 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 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 capacity of 130,000. Hyundai has been steadily expanding its sales in India, ranking just behind Maruti Suzuki.

Overall, these strategic moves aim to address Hyundai's challenges in the Chinese market and explore new opportunities in India and Indonesia.

By Sarah Chea [[email protected]]

FutureCar Staff