Hyundai Motor began to escape from sluggish sales in the Chinese market due to the negative aftermaths of the deployment of the terminal high altitude area defense (THAAD) system on the Korean peninsula while operating its Chongqing factory, which is a base to tap into the midwestern area of China and the fifth production base in China.
Hyundai Motor held a ceremony in honor of starting production of the 300,000-unit Chongqing factory in an economic development zone in the Liangjiang New Area of Chongqing, China with the participation of Hyundai Motor officials such as vice chairman Chung Eui-sun and high-ranking Chinese officials and politicians on July 19 (local time). The Chongqing plant, the construction of which started in June 2015, started production in two years and one month. The plant was built on land of 293,000 square meters with a floor area of 293,000 square meters and, as a general plant, is loaded with not only with press, car frame, painting, design lines but with an engine plant. Hyundai Motor and the joint venture Beijing Automotive Group invested a total of US$1 billion in the construction of the Chongqing plant.
Hyundai Motor is planning to produce an Avante-class new subcompact at its Chongqing plant, which began production on the same day. Starting next year, the plant will produce the Kona in a blitz which was launched in Korea in June, aiming at the rapidly growing small sports utility vehicle (SUV) market. The Chongqing plant currently in tentative operation will start full operation in August.
The Chongqing Factory is located in Chongqing City which is the world's largest city with a population of 30 million and the core city of the Changjiang Economic Belt which belongs to a national development strategy serving as the political and economic center of China's Midwest. Hyundai Motor has grown mainly in Beijing and northeastern China. But the operation of the plant is expected to enable Hyundai Motor to make a foray into the Chinese midwestern region where a surge in car demand is forecast in the future. In addition, Hyundai Motor has completed a production system to roll out 1.65 million units and 2.7 million units including that of Kia Motors in China as a result of the operation of its Chongqing factory.
The construction of the Chongqing plant was a long-time dream for Hyundai Motor in the expansion of its business in the Chinese midwestern market. But there is also concern about the initial normalization of the plant at a time when China’s retaliation for South Korea’s deployment of the THAAD system has halved Hyundai Motor’s sale in China. However, Hyundai Motor is planning to utilize the start of production at the Chongqing plant as a catalyst for its sales recovery as it cannot give the Chinese market which is the world’s largest automobile market with 23 million units. "We will continue to make efforts to recover sales by injecting competitive new models such as SUVs and eco-friendly cars and strengthening dealership networks as we have secured production bases covering the Mideast of China as well as the North and the East of China," a Hyundai Motor official said.