Hyundai Motor Co., Korea's largest carmaker, adding details to its pledge to expand operations into China, which include plans to build a second passenger car plant. This will, of course, support Hyundai Automotive Group’s drive to expand in the world's fastest growing auto market--China. Hyundai Motor also plans to double the size of its existing China plant.
Chung Mong-koo, Hyundai AG chairman announced he had finalized an agreement with senior Beijing officials to build a new plant on a 3.3-square-kilometer site near the capital. Hyundai AG expects to spend $600 million on the plant.
Chairman Chung noted that the new plant will play a crucial role in the manufacturer's efforts to raise Hyundai Motor production capacity in China to 600,000 units by 2007.
At the new facility, Hyundai plans to manufacture 300,000 Click minicars and other models per year by 2007.
The carmaker now has a plant in Beijing that produces 150,000 Avante compacts and Sonata midsize sedans each year. Hyundai Motor officials stated they invest another $340 million to double the output of the existing plant.
Current plans are for Hyundai Motor to add its Tucson sport utility vehicle to its current Beijing production line by the end of this year.
Interestingly Chairman Chung also reached has negotiated an agreement with the Beijing government officials to offer 80,000 Sonata sedans to the government as the new standard car for the capital's taxi services. The contract if finalized is expected to be worth $130 million.
The new announcements bolsters Hyundai and affiliated Kia Motors Corp. drive for a combined production capacity of 1 million units in China by 2008.
Hyundai Motors operates a joint venture with Beijing Automotive Industry Holding Co., while Kia Motors has teamed up with Dongfeng Motor and Yueda Group. The two companies manufactured and sold 103,136 units in the country last year and commanded a 2.3 percent market share. Hyundia AG aspires to command 10% of the Chinese market by 2010.
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