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

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 began production in 2017, has an annual production capacity of 300,000 units.

Hyundai Motor spokesperson stated, "Hyundai Motor has been implementing various measures to improve sales performance in China. We plan to enhance profitability by optimizing our production lineups." The spokesperson also mentioned that no buyers or schedule have been decided yet.

This sale is part of Hyundai's ongoing restructuring of its China business to focus on profitability. Previously, Hyundai had five plants in China, but it sold one in 2021. The company aims to eventually operate only two plants, which will be optimized for production and used for exports to emerging markets.

Hyundai and its affiliate Kia have experienced a decline in vehicle sales in China in recent years, mainly due to the growing popularity of electric vehicles. In contrast, Tesla was the only foreign brand to increase its market share in China during the first half of the year, according to industry data.

China's passenger vehicle sales have been contracting, with July marking the second consecutive month of decline. Despite efforts to stimulate consumer demand through price reductions and government measures, the market remains challenging.

($1 = 7.2942 Chinese yuan renminbi)

Reporting by Qiaoyi Li, Zhang Yan, and Brenda Goh; Additional reporting by Heekyoung Yang

Our Standards: The Thomson Reuters Trust Principles.

FutureCar Staff