South Korea’s largest automaker, Hyundai Motor, recently announced it would move to build two vehicle plants in China, the world’s biggest auto market, even as the country’s economy has started to slowdown.
The South Korean carmaker is boldly betting on China, with the planned facilities being the company’s first new manufacturing plants since 2012 as the competition in the country intensifies. Hyundai said the two plants, set to begin production in 2016 and 2017 would assist the carmaker in its strive to better compete with the foreign powers in China, namely Volkswagen and General Motors. The two locations are Changzhou, Hebei province and Chongqing, with construction starting in the second and third quarters of 2015. Kia Motors, Hyundai’s affiliate, also said it has decided to increase output at one of its three Jiangsu province plants from the current figure of 300,000 units to 450,000 vehicles by 2016.
Both automakers refrained from disclosing the value of their investments but disclosed that the two new factories – each with an installed capacity of 300,000 autos – and Kia’s upgraded facility would allow the two companies to retain their current market share of more than 10% in China. Toghether, the carmakers expect to be able to produce in excess of 2.7 million passenger and commercial vehicles by 2018 in the country.