 Choi Han-young, left, vice chairman of Hyundai Motor’s commercial vehicle division, shakes hands with Sun Zhentian, chairman of Ziyang Nanjun Automobile after signing a deal to set up a joint venture to manufacture commercial vehicles in Chengdu, China, Thursday. Both sides will each invest 250 billion won to produce and sell commercial vehicles from next year. / Courtesy of Hyundai Motor |
By Kang Seung-woo
Hyundai Motor has signed a joint venture with a Chinese commercial vehicle maker in its effort to build its legacy as the world’s largest auto market.
Hyundai, the nation’s No. 1 vehicle producer, said Friday that it reached the deal worth 500 billion won ($441 million) with Sichuan Province-based Ziyang Nanjun Automobile the previous day.
The Chinese car maker, established in 1998, is one who produces all kinds of commercial vehicles, and is the 11th largest with a total capital of 130 million yuan, more than 1200 employees and more than 400 different professional technicians.
It runs two plants, which are located in Chengdu and Ziyang and has an annual output capacity of 120,000 vehicles.
Through the contract, both companies will each invest 250 billion won to produce trucks, buses and their engines and they will also push forward the joint venture in sales, research and development and after-sales services.
The companies are expected to sell about 90,000 vehicles in 2011, but the number will increase to 300,000 by 2015 in a plant to be built in the province early next year, the Korean carmaker said.
They also plan to churn out a variety of vehicles fitted for local peculiarities.
“I firmly believe that with the combination of Hyundai’s technology and experience and Nanjun’s market potential, we will emerge as a noticeable and competitive player in the commercial vehicle segment of China,” Vice Chairman of the Management Board Sul Yeong-heung said.
“Through continuous investment and technical development, we will try to evolve into a leading company.”
Hyundai Motor, the world’s fifth-largest auto maker, expects that they will see a great deal of synergy in the Chinese market on the strength of the partnership.
Because of the Chinese government’s plan to develop the country’s wild western regions, the demand for commercial vehicles has been growing steadily.
In addition, it is seen as an significant action that Hyundai’s tie-up in Sichuan Province, the stepping stone of the government-led development projects in the areas, given that other rival motor companies do their businesses in major cities, including Beijing, Guangzhou and Shanghai.
“It is unavoidable for Hyundai Motor to enter the Chinese commercial vehicle market in order to expand its presence in the overall industry of China,” said Choi Han-young, vice chairman of the company’s commercial vehicle division.
The world’s most populated country is already the world’s single largest market for commercial vehicles, as well as passenger vehicles, with some 4.5 million commercial vehicles forecast to be sold there in 2010 alone, according to the firm.
Hyundai Motor is one of the most popular foreign brands for passenger vehicles in China with over 510,000 vehicles sold there in the first nine months of this year, up 23.8 percent from the same period last year.
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