Hyundai Motor Group sells Chongqing factory for $224 mn

Hyundai Chongqing factory’s ground breaking event on 2015. [Courtesy of Hyundai Motor Group]

Hyundai Motor Group has sold its manufacturing plant in Chongqing, China, for about 300 billion won ($224 million), a move that shows the South Korean auto giant is restructuring its business in the world’s largest automobile market.

Maeil Business Newspaper has learned on Tuesday that Beijing Hyundai Motor Co., its joint venture in China, has sold the Chongqing factory to an industrial park developer based in Liangjiang New Area in Chongqing for 1.62 billion yuan at the end of 2023.

The sale process was completed in less than four months since it was initiated in August 2023.

The Chongqing factory, completed in 2017, was Hyundai Motor Co.’s fifth production base in China, with an annual production capacity of 300,000 units.

The buyer of the Chongqing factory is a company with a majority stake held by Chongqing Liangjiang New Area Development & Investment Group Co., a company owned by the Chongqing city.

The Chongqing factory will reportedly be converted into an electric vehicle production facility and operated by another subsidiary of Chongqing Liangjiang New Area D&I Group.

Chongqing has been developing an environmentally friendly vehicle industrial complex, attracting major automotive manufacturers, including Beijing Hyundai, SAIC General Motors Corp., and Changan Automobile Co.

The industrial park has now become a core automotive production base, with the production of green vehicles surpassing 100 billion yuan for the first time in the first 11 months of last year.

With the completion of the Chongqing factory sale, Hyundai Motor is expected to accelerate its restructuring of business in China.

The automaker has faced challenges in China due to the disagreement over the Terminal High Altitude Area Defense (THAAD) system installation in Korea in 2017 and the Covid-19 pandemic.

Hyundai Motor has also recently faced intensifying competition with local brands offering affordable EVs.

The Chongqing factory sale marks the second sale of a local factory in China by Hyundai Motor in over two years, following the sale of its Beijing 1 factory in 2021.

Hyundai Motor plans to potentially streamline its Changzhou factory as well, leaving only the Beijing 2 and 3 factories in China, with a total annual production capacity of 750,000 units.

Hyundai Motor aims to make a breakthrough in the market with a strategy focused on high-end, high-performance cars.