Hyundai sells Chongqing plant

author: FutureCar Staff    

Beijing Hyundai Motor is putting its Chongqing plant up for sale with a starting price of 3.68 billion yuan ($505 million). This move comes as the South Korean automaker adjusts its strategy in China due to intense price competition and a slowdown in demand. The sale includes the land use rights, equipment, and other facilities of the Chongqing plant, which is a joint venture with Beijing Automotive Group Co.

The Chongqing plant, which began production in 2017, has an annual production capacity of 300,000 units. Hyundai Motor spokesperson stated that the company is implementing various measures to improve sales performance in China and plans to enhance profitability by optimizing its production lineups. However, no buyers or schedule for the sale have been decided yet.

This decision to sell the Chongqing plant follows Hyundai's announcement in June that it would further restructure its China business to prioritize profitability. Previously, Hyundai had five plants in China, but sold one in 2021. The company intends to eventually operate only two plants, focusing on optimizing production and using them for exports to emerging markets.

Hyundai and its affiliate Kia have experienced a decline in vehicle sales in China over the past few years, largely due to the growing popularity of electric vehicles in the country. Interestingly, Tesla was the only foreign brand to increase its market share in China during the first half of the year, according to Chinese industry data.

In July, China's passenger vehicle sales contracted for the second consecutive month, as a price war and government measures failed to incentivize consumers. This challenging market environment has prompted Beijing Hyundai Motor to make strategic changes to its operations in China.

Source: Reuters

FutureCar Staff