Hyundai sells Chongqing plant for $230 million amid slumping sales

Hyundai Motor sold its manufacturing plant in Chongqing, China, for 1.62 billion yuan ($220 million) as the Korean automaker juggles its Chinese business amid slumping sales.

Hyundai Motor employees work at its No. 3 Beijing plant in China [HYUNDAI MOTOR]

Hyundai Motor sold its manufacturing plant in Chongqing, China, for 1.62 billion yuan ($230 million) as the Korean automaker juggles its Chinese business amid slumping sales.

The Korean automaker confirmed on Tuesday that it sold the plant to a company owned by the Chongqing city government in a move to "improve profitability in China and increase business efficiency."

The sell-off comes just four months after the automaker put the plant up on sale in August. The Chongqing plant, a joint venture with Beijing Automotive Group, began production in 2017 with an annual production capacity of 300,000 units.

With the sale, Hyundai now only has three plants in China. It originally had five factories in China, three in Beijing, one in Chongqing and one in Changzhou, but sold off its No. 1 Beijing factory in 2021.

Its Changzhou plant will also be up on sale within the year. The plant has halted operation since last year.

The Chinese government will likely renovate the plant to an EV facility, according to multiple media reports.

The decision comes as Hyundai's plummeted sales in China, especially after 2016 when tensions between Korea and China increased due to the deployment of the Terminal High Altitude Area Defense system, or Thaad, on Korean soil.

Hyundai Motor and Kia only hold 1.9 percent of China's auto market. They sold around 1.8 million vehicles in China in 2016, but this number plunged to 909,000 in 2019 and some 339,000 in 2022.

BY SARAH CHEA [chea.sarah@joongang.co.kr]