Beijing Hyundai Motor to sell assets from Changzhou plant

Hyundai Motor‘s plant in Changzhou, China. [Photo by Hyundai Motor Co.]

Hyundai Motor Co.‘s Chinese joint venture has been working on divesting key assets from its plant in Changzhou, southern Jiangsu Province, following the sale of its Chongqing facility in 2023, a move that is part of the Korean automaker’s strategy to optimize its operations in China.

According to industry insiders, Beijing Hyundai Motor Co. listed three heavy equipment items from the S2 line of the Changzhou plant for sale on the China Beijing Equity Exchange, including a 5400-ton press line and two 2400-ton press lines with a minimum bid price of 11.7 billion won ($8.8 million), on Tuesday. The Changzhou plant has been out of service since June 2023.

To downsize and streamline its operations in response to evolving market dynamics, Beijing Hyundai Motor has chosen to divest its building and equipment separately instead of selling off the entire Changzhou plant outright.

The automaker’s decision comes as the Chinese government steps up its push towards eco-friendly vehicle manufacturing, particularly electric vehicles (EVs), and a phase-out of internal combustion by 2035. As a result of these initiatives, conventional engine production, to which Beijing Hyundai Motor‘s Changzhou plant has been dedicated since it was built, is expected to become obsolete over time, industry observers said.

Beijing Hyundai Motor will now focus on optimizing its operations to reduce fixed costs rather than solely aiming for increased sales. The joint venture has experienced operating losses since 2017, with annual losses averaging around 1 trillion won over the past three years from 2020 to 2022.