Hyundai Motor, BAIC to invest $1.1 billion in Chinese arm

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Hyundai Motor, BAIC to invest $1.1 billion in Chinese arm

Published: 12 Dec. 2024, 17:50

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Visitors are crowded at Hyundai Motor's booth at Auto China 2024 in Beijing in April. [YONHAP]

Hyundai Motor and China's BAIC Motor will, together, invest $1.1 billion in China as the Korean automaker seeks to bounce back in the world's largest EV market after years of struggle.

The investment will be injected into Beijing Hyundai, the two carmakers' 50:50 joint venture in China that handles the production and sale of Hyundai cars in China, according to BAIC Motor's regulatory filing released Wednesday.

Hyundai cited a plan to “release more Chinese customer-targeted products and expand exports,” as reasons behind the decision, along with “investment in new technologies and products to achieve development strategies.”

Hyundai's sales in China, which reached 1.8 million in 2016, plunged to one-fifth last year as major Korean retail companies took a hit from tensions between Korea and China regarding the deployment of the U.S.-led antimissile Terminal High Altitude Area Defense (Thaad) system

Its share fell from 6 percent to 1.4 percent during the same period. Beijing Hyundai currently runs two of its plants in Beijing, with a total capacity of 750,000 units, out of five it originally had in China.

Beijing Hyundai is currently in the process of developing a China-dedicated EV model, code-named OE RE, installed with lithium iron phosphate batteries. It plans to bring that to market in 2025, with a plan of launching five more clean cars including hybrids.

With the Korean automaker accelerating its electrification, China, the world's biggest EV market, is a region that Hyundai cannot give up on. A total of 13.7 million EVs were sold last year, and of them, some 8.2 million were from China.

EV sales in China are on a constant upward trend despite slowing demand for EVs in other foreign markets, with players like BYD contributing to the growth. BYD became the largest EV maker in the world last year, beating Tesla.

Hyundai Motor shares rose 1.2 percent to close at 211,500 won on Thursday.

BY SARAH CHEA [[email protected]]