Hyundai Motor's Chongqing Plant Listed for $505 Million

author: FutureCar Staff    

Hyundai Motor is selling its Chongqing plant in China for $505 million as part of its efforts to restructure its Chinese business amidst declining sales. The Korean automaker will also put its Changzhou plant up for sale within the year, reducing its total number of operational factories in China from five to two. Beijing Hyundai is selling the land use rights, equipment, and other facilities of its Chongqing plant, which was halted a year ago.

The sale of the Chongqing plant comes after Hyundai announced its Chinese business reconstruction plan in June. Initially, 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, a joint venture with Beijing Automotive Group, started production in 2017 with an annual capacity of 300,000 units.

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, but this number dropped to 909,000 in 2019 and 339,000 last year.

To focus on the premium and high-margin Genesis and SUVs, Hyundai will reduce its number of model lineups from 13 to 8. Additionally, Hyundai Steel, which supplies automotive steel plates to Hyundai and Kia, is selling its two Chinese automotive steel plate facilities.

Hyundai Motor is now 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 units, as the Talegaon plant has an annual capacity of 130,000.

Hyundai Motor has been steadily expanding its sales in India and is currently the second-largest automaker in the country, just behind Maruti Suzuki.

By Sarah Chea [[email protected]]

FutureCar Staff