Hyundai breaks ground for Chongqing plant
Hyundai Motor Vice Chairman Chung Eui-sun, third from left, and other officials pose during a groundbreaking ceremony for its fifth China plant in Chongqing, Tuesday. Participants from left are; Xu He Yi, Beijing Hyundai Motor chairman; Kim Jang-soo, Korean ambassador to China; Chung; Sun Zheng Cai, Communist Party chief of Chongqing; Huang Qi Fan, Chongqing mayor; and Zhang Gong, Beijing vice mayor. / Yonhap
Fifth Chinese plant to have 300,000 capacity
By Park Jin-hai
Hyundai Motor broke ground for its fifth China plant in Chongqing, Tuesday, to expand its presence in the world’s largest auto market.
The facility will have an annual production capacity of 300,000 vehicles. Along with the fourth plant Hyundai has been building in Changzhou since April, it has secured a strong foothold to make inroads into the fast growing Midwest region of China.
During the ceremony, at which 600 senior government officials and diplomats were in attendance, Hyundai Motor Vice Chairman Chung Eui-sun said, “Having the new plant as our springboard to western China, we will become a global carmaker with large production bases that cover the East and the West of China.”
Hyundai and its Chinese partner will respectively invest $1 billion in the Chongqing plant. It plans to complete construction by the first half of 2017.
It will produce mainly strategic compact models and SUVs for the Chinese market.
Chung also unveiled Hyundai’s long-term growth strategy in China.
He emphasized four strategies ― diversification of production bases, wider lineups of strategic models, close and systemized customer management and entry into the environmentally friendly car market.
With the two new plants in China, Hyundai and its affiliate Kia Motors aim to expand their combined annual production capacity to 2.7 million vehicles in 2018 in China.
The company also said it will launch four to five strategic models each year, ranging from economy cars to luxury models.
It will focus on the development of small sedans and SUVS with price competitiveness. It will also create new demand for the niche market between global carmakers and local automakers.
By 2016, Hyundai will increase its dealerships to 2,000 from about 1,700 in the country, it said.
Regarding the environmentally friendly cars, with the start of new Sonata hybrid that Beijing Hyundai will produce by the end of this year, the company will diversify locally manufactured hybrid lineups as well as expand to include plug-in hybrids and electric vehicles.
Auto sales in China have been slowing as the world's second-largest economy grew 7.4 percent last year, marking its slowest pace in 24 years.
Price cuts offered by Chinese local brands made it difficult for Hyundai to sell vehicles.
In May, sales of passenger cars in China fell 0.4 percent on year to 1.9 million units, according to the China Association of Automobile Manufacturers.
Hyundai’s China sales declined 3.5 percent on year to 450,084 in the first five months of the year.