Hyundai banks on China with 2 plants
Print Edition
HYUNDAI Motor Co said yesterday that it would build two factories in China, its first new manufacturing plants since 2012 as the South Korean automaker bets on growth in the world’s biggest auto market even as the economy slows.
Hyundai said the factories, which will start production in 2016 and 2017, would help it better compete with rivals including Volkswagen and General Motors. Affiliate Kia Motors Corp also said it would expand capacity at one of its three Jiangsu Province factories to up to 450,000 vehicles by 2016 from 300,000 now.
The automakers declined to give a value for the investments but Hyundai said the factories — which are capable of producing 300,000 vehicles each — would help it and Kia maintain their market share of over 10 percent in China.
The duo said they expect to have a combined China production capacity of 2.7 million passenger and commercial vehicles by 2018.
Hyundai and Kia’s expansion plans come a few days after executives at Toyota Motor Corp said the Japanese automaker was likely to miss its 2014 target due to a faster-than-expected economic slowdown.
The plans announced yesterday also provide further evidence that the two automakers are easing an unofficial moratorium on capacity growth imposed about two years ago by Chairman Chung Mong-koo due to quality concerns.
Hyundai said construction of its Hebei Province plant, to be sited in Changzhou, will start in the second quarter of 2015. The factory will be able to produce small vehicles by the second half of 2016 and production will reach full capacity by 2018.
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