Hyundai Motor considers two more plants in China

Hyundai Motor considers two more plants in China

Hyundai Motor’s plans to expand production in China appear to be gaining fresh momentum with two Chinese cities ? Chongqing and Cangzhou ? being cited as possible venues for its fourth and fifth plants.

“Along with the fifth Chongqing plant, the company is newly considering renovating an existing plant in Cangzhou to build its fifth plant in China,” a ranking Hyundai executive was quoted as saying by a local newspaper on Wednesday.

The flagship carmaker of Hyundai Motor Group has been considering a fourth plant with an annual production capacity of 300,000 vehicles in Chongqing, southwestern China, given the soaring demand in the region.

In March, the group’s chairman Chung Mong-koo also met the city officials to sign a tentative deal to secure the plant site.

The talks, however, had been stalled as the Chinese government asked Hyundai to consider another venue, Cangzhou, a southwestern city near Beijing where the carmaker has already operated three plants to produce 1.05 million vehicles per year.

As a breakthrough proposal, according to the unnamed Hyundai official, the Korean carmaker is said to have proposed to build one plant each in the cities. The Cangzhou plant will be constructed by renovating an existing building occupied by Hyundai’s train-building joint venture in China.

“It depends on the Chinese government’s administrative approval before construction work starts at any of the plants,” he said.

A Hyundai spokesperson said that the company was still gauging the profitability of the new Chinese plants, adding no final decisions have yet been made.

Currently, Hyundai and its affiliate Kia Motors operate three factories each in China near full capacity, producing 1.05 million and 750,000 vehicles, respectively.

With the planned opening of the fourth plant in Chongqing in 2016, the Korean duo’s Chinese production is estimated to reach the 2 million mark.

Hyundai’s new expansion plans come at a time when its global rivals are upping the offensive in the lucrative Chinese market and elevating production capacity at local plants.

General Motors plans to set up three new plants in China next year in a bid to build 940,000 vehicles and 1.4 million engines. Nissan also completed its fourth plant with an annual capacity of 150,000 vehicles in Dalian in November.

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