Hyundai Motor's Chongqing Plant Listed for Sale at $505 Million

author: FutureCar Staff    

Hyundai Motor is selling its Chongqing plant in China for $505 million, as the Korean automaker adjusts its Chinese business strategy due to declining sales. The company will also put its Changzhou plant up for sale later this year, reducing its 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.

A Hyundai spokesperson stated that the details about the buyer and sale date have not been confirmed yet. This move follows Hyundai's Chinese business reconstruction plan announced in June. The Chongqing plant had ceased operations a year ago. Originally, 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 started production in 2017 with an annual capacity of 300,000 units, was a joint venture with Beijing Automotive Group. Hyundai's decision to sell comes as a result of plummeting 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 figure dropped to 909,000 in 2019 and further declined to 339,000 last year. To streamline its operations, Hyundai plans to reduce the number of model lineups from 13 to eight, allowing the company to focus on the premium and high-margin Genesis and SUVs.

In addition to the Chongqing plant sale, Hyundai Steel, which supplies automotive steel plates to Hyundai and Kia, is also selling its two Chinese automotive steel plate facilities. As a replacement for China, Hyundai Motor is now looking to India and Indonesia as its new manufacturing bases. In July, the company signed a deal with General Motors India to acquire its manufacturing facility in Talegaon, Maharashtra, which has an annual production capacity of 130,000 units. This acquisition is expected to boost Hyundai's production capacity in India to 1 million units.

Hyundai Motor has been gradually expanding its sales in India in recent years and is positioned right behind the market leader, Maruti Suzuki. With these strategic moves, Hyundai aims to navigate the challenging Chinese market and strengthen its presence in other promising markets.

By Sarah Chea [[email protected]]

FutureCar Staff