Hyundai plans two new fac­to­ries in China

China Daily (USA) - - BUSINESS - By REUTERS in Seoul

South Korea’s Hyundai Mo­tor Co said two new fac­to­ries in China will pro­duce more en­vi­ron­men­tally friendly ve­hi­cles and mod­els tar­get­ing the world’s big­gest auto mar­ket, as the au­tomaker strives to fend off grow­ing com­pe­ti­tion from Chi­nese ri­vals.

Hyundai said in a state­ment on Tues­day it has com­pleted its lat­est Chi­nese plant, its fourth, in Cangzhou, He­bei prov­ince, and will open an­other one in Chongqing next year. The ad­di­tion of the two plants — each with an­nual pro­duc­tion ca­pac­ity of 300,000— will lift the to­tal num­ber of ve­hi­cles it can make in China, its big­gest mar­ket, by about half to 1.81 mil­lion a year.

The fo­cus on green cars is part of anewHyundai strat­egy for China. The au­tomaker, which ranks third in China sales to­gether with af­fil­i­ate Kia Mo­tors, has seen its mar­ket share fall to 8.9 per­cent last year — a seven-year low— from 10.4 per­cent a year ear­lier as Chi­nese ri­vals lured away cus­tomers.

“We will ac­cel­er­ate our ef­forts to achieve a mar­ket share of more than 10 per­cent again with the open­ing of Cangzhou fac­tory,” Hyundai said. It didn’t dis­close how much it’s in­vest­ing in the new plants.

The South Korean duo will have to­tal pro­duc­tion ca­pac­ity in China of 2.7 mil­lion ve­hi­cles once Kia’s 890,000 ca­pac­ity is counted in.

Hyundai said it aims to pro­duce nine green ve­hi­cles in China by 2020, tar­get­ing 10 per­cent of its sales in the coun­try by that year, to meet fuel econ­omy reg­u­la­tions and com­pete with Chi­nese au­tomak­ers, which dom­i­nate the seg­ment.

The au­tomaker said the new plants will build mod­els of vary­ing sizes to com­pete with low-cost Chi­nese ri­vals.

As part of its new strat­egy, Hyundai will boost the num­ber of China deal­er­ships to 1,400 by 2020, from 1,000 cur­rently. It also plans to se­cure deal­ers in south­west­ern re­gions and small cities.

num­ber of deal­er­ships Hyundai plans to have in China by 2020

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