Hyundai sells Chongqing plant

author: FutureCar Staff    

Beijing Hyundai Motor is selling its Chongqing plant in China for a starting price of 3.68 billion yuan ($505 million), as the company adjusts its strategy in response to intense price competition and slowing demand. The sale includes the land use rights, equipment, and other facilities of the plant, which is a joint venture with Beijing Automotive Group Co. The Chongqing plant began production in 2017 with an annual capacity of 300,000 units.

A spokesperson for Hyundai Motor stated that the company has been implementing various measures to improve sales performance in China. They also mentioned plans to enhance profitability by optimizing the operation of production lineups. As of now, no buyers or schedule for the sale have been determined.

This decision comes after Hyundai announced in June that it would further restructure its China business to prioritize profitability. At its peak, Hyundai had five plants in China but has already sold one in 2021. The company aims to eventually operate just two plants, focusing on production optimization and 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 increasing popularity of electric vehicles. However, Tesla, a foreign brand, managed to increase its market share in China during the first half of the year, according to Chinese industry data.

China's passenger vehicle sales have contracted for a second consecutive month in July, with a price war and government measures failing to incentivize consumers. The market continues to face challenges as it navigates through these tough conditions.

Source: Reuters

FutureCar Staff