Hyundai's Chongqing Plant for Sale

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). The move comes as the South Korean automaker adjusts its strategy in China due 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 and has 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 their 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. At its peak, Hyundai had five plants in China, but it has already sold one and intends to operate just two in the future. The remaining plants will be optimized for production and used for exports to emerging markets.

Hyundai and its affiliate Kia have faced declining vehicle sales in China over the past few years, mainly due to the rising popularity of electric vehicles in the country. In contrast, Tesla is the only foreign brand that has managed to increase its market share in China during the first half of this year, according to Chinese industry data.

In July, China's passenger vehicle sales experienced a second consecutive month of contraction. Despite the government's attempts to incentivize consumers through price wars and partial measures, the market continues to face challenges.

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

Our Standards: The Thomson Reuters Trust Principles.

FutureCar Staff