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). This move comes as the South Korean automaker adjusts its strategy in response to intense price competition and a slowdown in demand in China.

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 plant, which started production in 2017, has an annual production capacity of 300,000 units.

Hyundai Motor spokesperson stated, "Hyundai Motor has been pursuing various measures to improve sales performance in China. We plan to strengthen our efforts to improve profitability through optimizing the operation of our production lineups." However, as of now, the buyers and schedule for the sale have not been decided.

This decision to sell the Chongqing plant follows Hyundai's announcement in June that it would 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, 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, partly due to the increasing popularity of electric vehicles in the country. In contrast, Tesla was the only foreign brand that managed to increase its market share in China in the first half of this year.

China's passenger vehicle sales have been contracting, with July marking the second consecutive month of decline. Despite government measures and price wars, consumer incentives have failed to stimulate growth in the market.

Source: Reuters

FutureCar Staff