Hyundai Motor’s Chung worries about ChinaHyundai Motor Group Chairman Chung Mong-koo will visit China for three days to boost the company’s struggling car sales.
Chung will also attend the groundbreaking ceremony for the No. 5 plant that will be built in Chongqing with a total production capacity of 300,000 units per year.
“The group’s leadership including Chairman Chung will go to China to attend the groundbreaking ceremony on June 24,” said a spokesman of Hyundai Motor. “After attending the ceremony, the boss will move to Sichuan, where the company’s commercial vehicle production plant is located.”
The plant being built in Chongqing is significant for the company. It took three years to get approval from the Chinese government, and to get approval it had to build another factory in Hebei.
This will be Chung’s first trip to China in 15 months. He isn’t happy about the company’s recent poor performance in the world’s second-largest car market. Even worse, sales of Hyundai’s rivals including GM and Volkswagen, which are considered the Big 3 car sellers in China along with Hyundai, are improving, as are sales by Japanese rivals Toyota, Honda and Nissan.
Chung will meet with local executives to check the current situation and give directions to turn it around.
In May, Hyundai Motor and Kia Motors sold 129,027 units together in China, a 9.9 percent drop from a year earlier and the biggest year-on-year decline for the year. Hyundai Motor sold 80,022 cars in May, a 12.1 percent drop, while the year-on-year sales by Kia Motors decreased by 5.9 percent to 49,005 units. Hyundai Motor alone planned to sell an average of 90,000 cars per month this year in China.
But rival Honda is riding high with crossover utility vehicle Vezel, which helped boost the company’s year-on-year sales by 32.3 percent to more than 80,000 cars in May in China. Toyota also sold 91,900 cars in the same period, a 13.3 percent rise from a year ago, thanks to the weak yen.
“The situation will get much tougher when Toyota completes its capacity expansion in China in 2017,” said Lee Hang-koo, a researcher at the Korea Institute for Industrial Economics and Trade.
BY KWON SANG-SOO AND KIM YOUNG-MIN [email@example.com]