Hyundai Motor Group has sold its Chongqing plant in China for about 300 billion won. This has reduced the number of production bases in China from five to three since Hyundai entered the country in 2002. The decision was made to reorganize the structure of its Chinese business, thereby boosting its profitability.
Hyundai’s Chinese joint venture, Beijing Hyundai, sold the Chongqing plant to Yufu Industrial Park Construction in Liangjiang New District of Chongqing, China late last year for 1.62 billion yuan (US$226 million), according to industry sources on Jan. 16.
The Chongqing plant, which went live in 2017, has an annual production capacity of 300,000 units. Hyundai Motor once had five plants in the Chinese market. The Chongqing plant, which was completed in 2017, was the carmaker’s fifth Chinese production base with a production capacity of 300,000 units per year.
The plant ramped up its production capacity to 2.7 million units per year, but sales plummeted in 2017 due to the Chinese government’s retaliation against the deployment of the THAAD system in South Korea. Its sales fell to about 500,000 units in 2021 from 1.79 million units in 2016. Hyundai Motor sold off Beijing Plant 1 and shut down the Chongqing plant in 2021.
Hyundai decided to reorganize its Chinese business and sold off Beijing Plant 1 in 2021. Following the Chongqing plant, the company plans to sell off the Changzhou plant as early as this year. This will leave only two plants, Beijing 2 and 3, with a total annual production capacity of 750,000 units.