Hyundai plans to build its fourth plant in China, part of its plan to increase production in other markets to offset the effect of the firm domestic currency compared with the falling yen.
Hyundai’s vice chairman Hsueh Yung-hsing made this announcement today, May 10th, but it is not certain yet if company’s chairman Chung Mong-koo will approve this plan due to his disciplined capaci strategy.
“We expect our capacity in China to become constrained by 2015 and 2016…and are considering a plant with a capacity of 300,000,” Hsueh Yung-hsing told reporters, adding western China is a candidate location for the new plant.
Hsueh, who is responsible for Hyundai and Kia’s China operations, said that a new plant is necessary for the automaker to keep its market share in the world’s largest auto market around 10% in 2015-2016 when analysts predict that the auto industry in China will increase to 20 million annually. He also added that Kia’s third plant in China will be completed in February 2014 and will boost company’s production capacity to 1.8 million units in China.
“Because of currency risks, we have been considering plants in the U.S, South America, Southeast Asia and elsewhere,” a top group executive told Reuters on Friday. “We have been long considering a U.S. plant in Alabama or Georgia, but we are taking a wait-and-see attitude. It’s fair to say the possible plant is on hold.”