South Korean auto company Hyundai Motor is pushing ahead with the sale of its first factory built in Beijing, South Korean media revealed.
According to Yonhap News Agency on May 28, Hyundai is negotiating with the Communist Party of China’s Beijing Shunyi District on the sale.
Beijing Shunyi District is the first plant built by Hyundai in Beijing, which has been in production since the end of 2002 with an annual capacity of 300,000 units but ceased production in April 2019 due to poor sales. Hyundai is a joint venture between Hyundai and Beijing Automotive, which built three plants in Beijing.
Yahoo Finance’s news shows that Continental Ideal Auto will invest RMB 6 billion to take over the first Hyundai plant and invest in a brand new production base. The project is scheduled to start production in 2023, with an industrial output of RMB 30 billion by 2024. The report, however, did not disclose the source. RISO declined Reuters’ request for a response.
Hyundai has five plants in China – the first, second and third plants in Shunyi, Beijing, and Cangzhou in Hebei and Chongqing in southwest China – and all four are still operating normally, except for the first plant in Shunyi, Beijing, which is out of production.
Data show that in 2020, Hyundai’s total sales volume will be 502,000 units, and the total annual planned production capacity of its factories will reach 1.65 million units, with a capacity utilization rate of only 30%.
South Korean goods such as Samsung cell phones, Hyundai cars and cosmetics were previously popular on the mainland, but in 2017, South Korea’s decision to deploy the U.S. Saad anti-missile system sparked panic in the Chinese Communist Party. The CCP incited the public to boycott Korean goods, which led to a sharp decline in sales of Korean goods in the mainland, and some had to withdraw from the Chinese market.