Hyundai Motor opens 4th plant in China
Hyundai Motor Group Chairman Chung Mong-koo, fourth from right, poses with Korean Ambassador to China Kim Jang-soo, third from right, and Chinese government officials during a ceremony to mark the completion of the Hyundai plant in Changzhou, Hebei Province, Tuesday. / Courtesy of Hyundai Motor
Changzhou plant expected to revitalize sales in world’s 2nd largest auto market
By Lee Hyo-sik
Hyundai Motor opened its fourth plant in China, Tuesday, bolstering its status as a leading automaker in the world’s second-largest automobile market.
Korea’s largest carmaker expects the plant in Changzhou, Hebei Province, about 200 kilometers southeast of Beijing, to act as catalyst for revitalizing its sluggish sales there.
With the newly-opened factory, capable of producing 300,000 compact sedans and sports utility vehicles (SUVs) annually, Hyundai will be able to more effectively compete with multinational and home-grown Chinese automakers.
The Changzhou plant, employing as many as 3,000 workers, will increase Hyundai’s annual production to 1.35 million vehicles in the country. When the firm’s fifth plant in Chongqing is completed next year, its production will further rise to 1.65 million.
The company held a ceremony marking the completion of the plant, attended by Hyundai Motor Group Chairman Chung Mong-koo and 800 senior Chinese government officials and executives of its business partners.
Chung said Hyundai will make the best use of the Changzhou plant to take another leap forward, pledging to mobilize more resources to market smart, eco-friendly sedans and SUVs.
“Since Hyundai opened its first Chinese plant in 2002, its cumulative sales have surpassed 8 million vehicles,” the chairman said. “Hyundai and its affiliate Kia Motors are now operating eight passenger and commercial vehicle production plants in China, including the Changzhou plant, churning out 2.4 million cars together each year.”
He said the automaker’s latest plant is an environmentally-friendly, smart factory, producing the new Verna compact sedan and other premium, high-quality vehicles for Chinese consumers. “The Changzhou plant will enable us to introduce new models in a timely manner and meet rapidly changing consumer needs.”
In the first nine months of the year, Hyundai sold 99,290 Verna sedans, making the model the No. 1 in China’s compact passenger sedan segment.
The company decided to expand its presence in the world’s second-largest economy to cope with intensifying competition with General Motors, Volkswagen and other global automakers, as well as with home-grown Chinese firms. China’s automobile demand has also prompted Hyundai to invest more there.
The Chinese automobile market is projected to reach 34.18 million vehicles, including 26.38 million passenger cars, in 2020, up from 25.4 million in 2015, according to Hyundai.
The Changzhou plant, which sits on a 1.92 million square-meter site, will initially produce 200,000 Verna sedans in 2017 and expand the volume to 300,000 in 2018 by producing SUV models.
The new facility boasts of superb transport infrastructure. It is only 200 kilometers away from Hyundai’s first plant in Beijing, meaning that it can easily secure supplies from existing auto parts makers and other partners. It can also readily use the firm’s logistics hub at the port of Tianjin, receiving a range of parts and other materials in a less costly and timelier manner.
“We mobilized all our knowhow and expertise to build the Changzhou plant as the most advanced smart automobile factory we could build,” a Hyundai Motor official said. “Its automation rate and productivity are the highest among Hyundai and Kia plants. The facility will produce an average of 38 cars per hour next year and increase the number to 66 in 2018 when it operates at its full capacity.”
Hyundai also unveiled its business strategies for the Chinese market, dubbed “Blue Melody.”
The automaker plans to further boost its customer service, as well as building a comprehensive, customer-tailored sales platform to make it more convenient for consumers to purchase its vehicles.
It will also increase the number of dealerships there from the current 1,000 to 1,400 by 2020, and invest more to introduce cutting edge hydrogen fuel electric and other eco-friendly vehicles.
Hyundai plans to focus more on people in their 20s and 30s, who have emerged as a main consumer group in China, as well as improving its image as a premium auto brand.