Hyundai Motor puts Chongqing plant up for sale at $505 million

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Hyundai Motor puts Chongqing plant up for sale at $505 million

Published: 23 Aug. 2023, 18:40

SARAH CHEA
chea.sarah@joongang.co.kr

Hyundai Motor employees work at its No. 3 Beijing plant in China [HYUNDAI MOTOR]

Hyundai Motor's Chongqing plant in China is up for sale at 3.68 billion yuan ($505 million), as the Korean automaker juggles its Chinese business amid slumping sales.

Its Changzhou plant will also be up on sale within the year, which will reduce Hyundai's total number of operational factories in China from five to two.

Beijing Hyundai is selling the land use rights, equipment and other facilities belonging to its plant in the southwestern Chinese city of Chongqing, according to Hyundai Motor on Wednesday.

"Details about the buyer and date have not been confirmed," a Hyundai spokesperson said.

The Chongqing sale comes two months after Hyundai announced its Chinese business reconstruction plan in June. Hyundai halted operations at the Chongqing plant a year ago.

Hyundai Motor's No. 3 Beijing plant in China [HYUNDAI MOTOR]

Hyundai Motor originally had five factories in China, three in Beijing, one in Chongqing and one in Changzhou. Hyundai sold off its No. 1 Beijing factory in 2021 and halted operations at the Chongqing and Changzhou plants.

The Chongqing plant, a joint venture with Beijing Automotive Group, began production in 2017 with an annual production capacity of 300,000 units.

The decision comes as Hyundai's plummeted sales in China, especially after 2016 when tensions between Korea and China increased due to the deployment of the Terminal High Altitude Area Defense system, or Thaad, on Korean soil.

Hyundai Motor and Kia sold around 1.8 million vehicles in China in 2016, but this number plunged to 909,000 in 2019 and some 339,000 last year.

The number of model lineups will be cut to eight from the current 13, allowing Hyundai to focus on the premium and high-margin Genesis and SUVs.

With the automaker's sluggish sales, Hyundai Steel, which supplies automotive steel plates to Hyundai and Kia, is also selling its two Chinese automotive steel plate facilities.

Hyundai Motor is now eyeing India and Indonesia as the new manufacturing base to replace China.

Hyundai Motor in July signed a deal with General Motors India to acquire its manufacturing facility in Talegaon, Maharashtra, that covers the plant itself as well as some of the machinery and manufacturing equipment there.

The Talegaon plant has an annual production capacity of 130,000, which will likely boost Hyundai’s production capacity in India to 1 million.

Hyundai Motor has gradually expanded sales in India in recent years, right behind leader Maruti Suzuki, according to data from the Society for Industrial and Applied Mathematics.

BY SARAH CHEA [chea.sarah@joongang.co.kr]