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 part of its strategy to adapt to fierce price competition and a slowdown in 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 and intends to enhance profitability by optimizing its production lineups. However, the spokesperson clarified that no buyers or schedule have been determined at this time.

This decision to sell the Chongqing plant follows Hyundai's announcement in June to further restructure its China business and prioritize profitability. At its peak, Hyundai had five plants in China but has already sold one in 2021. The company plans to eventually operate only 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 in recent years 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.

In July, China's passenger vehicle sales contracted for the second consecutive month, as a price war and government measures failed to incentivize consumers. The challenging market conditions have prompted Beijing Hyundai Motor to take strategic actions to adapt and improve its position in China's competitive automotive industry.

FutureCar Staff