Hyundai Motor heir’s China trip highlights carmaker’s priorities

[THE INVESTOR]] Hyundai Motor Vice Chairman Chung Eui-sun on Oct. 12 left for China for a last minute inspection of a new plant, highlighting the emphasis the company places on the world’s largest automotive market. The plant is set to open next week in Cangzhou, Heibei Province.

Hyundai’s fourth plant in China will further boost its production capacity in China, which already accounts for a fifth of its global capabilities.

The Cangzhou facility is built only 200 kilometers from Beijing, where the automaker already operates three plants rolling out 1.05 million units every year. The new plant will initially roll out 200,000 units of compact cars, but will gradually increase output to 300,000 units a year, the company said. 

Adding the Cangzhou plant and Hyundai’s fifth factory in Chongqing -- to be completed next year -- to the calculation, its annual Chinese production capacity will reach 1.65 million units.

Hyundai’s rapid expansion in China comes at a time when it is suffering a decline in domestic production and sales due to the ongoing strike and prolonged economic slump. Meanwhile, global automakers are aggressively jumping into the world’s second largest economy and increasing production capacity at their local plants.

Its auto sales in China decreased by 28 percent on-year in January and February this year. But beginning in the second half of the year, the South Korea‘s largest automaker has been recouping sales, delivering double digit growth on-year in July and August.

From January to August, Hyundai sold 678,000 units in China, up 6.9 percent from a year earlier. However, market watchers are grim on its ability to reach the annual sales target of 1.12 million units this year.

By Ahn Sung-mi (sahn@heraldcorp.com)