By Laura King
According to the Korea Economic Times, Hyundai Motor said that it had sold its factory in Chongqing for 1.62 billion yuan (approximately US$227 million).
Hyundai will plan to sell another Chinese factory and continue to restructure its business to survive in China, the world’s largest auto market.
Beijing Hyundai Motor said it sold its Chongqing factory to Chongqing’s Yufu Industrial Park Construction Investment Co., Ltd. for 1.62 billion yuan late last year.
The buyer’s largest shareholder, Chongqing Liangjiang New Area Development Investment Group, reportedly plans to renovate the factory so that its subsidiary can produce electric vehicles.
Hyundai Motor put the factory with an annual output of 300,000 vehicles up for sale in 2023, planning to sell the factory’s land use rights, equipment, and other facilities for 3.68 billion yuan.
According to Korean industry insiders, Hyundai Motor is currently planning to sell another factory in Cangzhou.
“To achieve an effective structure for business, we are striving to sharpen our efficiency in China,” a representative of the Hyundai Motor Company said.
“By selling the Chongqing plant, we are actively promoting the rationalization of production management to improve profitability.”
Since entering the Chinese market in 2002, Hyundai Motor has established five factories in China, three in Beijing, one in Cangzhou, and one in Chongqing.
However, Hyundai has sold a factory in 2021 due to declining sales. In 2022, the company’s market share in China dropped to less than 1%.
Hyundai Motor sold 1.14 million vehicles in China in 2016. However, as market competition becomes increasingly fierce, Hyundai Motor has been struggling in the Chinese market.
However, local drivers have also stayed away from Hyundai because it only sells electric versions of existing combustion engine cars, rather than models based on dedicated electric vehicle platforms.
Last year, industry insiders said that in order to revitalize its business in China, Hyundai had agreed to produce electric vehicles for BAIC’s new energy vehicle brand Jihu at a factory in Beijing.
In addition, due to fierce competition with Chinese automakers, the Korean automaker also canceled plans to introduce the IONIQ model, a dedicated electric vehicle built on Hyundai Motor Group’s eco-vehicle platform, to China.
