According to the Korean Economic Daily, Hyundai Motor announced on January 16th that the company has sold its factory in Chongqing for 1.62 billion yuan (approximately 227 million USD). Hyundai plans to continue restructuring its business in China by selling another factory in the country to survive in the world's largest automotive market.
Beijing Hyundai Motor stated that at the end of last year, the company sold the Chongqing factory for 1.62 billion Chinese yuan to Chongqing Yufu Industrial Park Construction Investment Co., Ltd. Reportedly, the major shareholder of the buyer, Chongqing Liangjiang New Area Development Investment Group, plans to renovate the factory for its subsidiary to produce electric vehicles.
Hyundai Motor listed the factory, which has an annual production capacity of 300,000 vehicles, for sale in 2023, planning to sell the land use rights, equipment, and other facilities for 3.68 billion yuan. According to industry insiders in Korea, Hyundai Motor is currently planning to sell another factory located in Cangzhou.
"We are working hard to improve business efficiency in China to achieve a better business structure," said a representative of Hyundai Motor. "By selling the Chongqing factory, we are actively promoting rationalization of production management to enhance 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, due to declining sales, Hyundai Motor sold one factory in 2021. In 2022, the company's market share in China dropped to less than 1%.
Hyundai Motor achieved a high sales volume of 1.14 million vehicles in China in 2016, but as market competition intensified, the company has faced challenges in the Chinese market. Moreover, local drivers have been hesitant due to Hyundai's focus on selling electric versions of existing internal combustion engine vehicles, rather than models based on a dedicated electric vehicle platform.
Last year, industry insiders reported that Hyundai has agreed to produce electric vehicles for Beijing Automotive Group's new energy vehicle brand, Jihoo, at a factory in Beijing, aiming to revitalize its business in China.
Additionally, due to intense competition with Chinese automakers, the South Korean automaker canceled its plan to introduce the IONIQ model to China. The IONIQ is a dedicated electric vehicle manufactured on Hyundai Motor Group's eco-friendly vehicle platform.
