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Hyundai Motor chairman Chung to sign deal for new China plant
Publication Date : 27-03-2014
Hyundai Motor Group chairman Chung Mong-koo on Wednesday left for China to sign a tentative deal to build a new production plant.
According to Hyundai officials, the chairman and city officials of Chongqing will meet on Thursday and sign a preliminary agreement on a new plant there.
The group, which owns the Hyundai and Kia brands, has recently sought to create a new production base in western China as its existing plants are located mostly in the north of the nation.
Chongqing, which is also home to General Motors and Ford factories, has often been cited as a possible venue due to the city’s burgeoning automotive industry.
With an additional production of some 300,000 vehicles per year at the new plant, Hyundai could elevate its annual production capacity in China to 23 million cars by 2016, officials said.
“The new plant is crucial for Hyundai and Kia to maintain a combined 10 percent market share in China,” said a Hyundai official.
As the Chinese car market is expected to reach 20 million vehicles a year by 2016, global carmakers like Volkswagen, GM and Nissan have pledged to expand their production capacity in the country in the coming years.
If finalised, the fourth China plant would be Hyundai’s first major manufacturing capacity investment since 2012 ― the year when the carmaker opened a car assembly plant in Brazil and its third China plant.
“Total car sales of Hyundai and Kia will hit the 10 million mark in China this year,” Chung said Wednesday in a statement. “We must lead the market trend to prepare for a new era.”
Before heading to Chongqing, the chairman also toured the construction site of a new plant of Sichuan Hyundai, the carmaker’s joint venture for commercial vehicles established in 2012.
In 2013, Hyundai Motor and Kia Motors posted record sales in China. Their combined sales surged 18 percent to 1.57 million vehicles.