Hyundai Motor Group plans to set up its fourth Chinese assembly plant in Chongqing city, Chairman Chung Mong-koo will sign an agreement on Thursday with the government of Chongqing to study the possibility of locating a plant there, Hyundai said in a statement. The city is the most likely site for the factory, the automaker said.
[ads id=”0″ style=”float:left;padding:9px;”]This move is part of the group’s efforts to actively cope with the hike in demand in China which has grown to the world’s largest automobile market. The Chinese automobile market has been expanding at an explosive pace in recent years.
“To increase or at least keep its market share, the decision to build a new plant would have been inevitable for the company,” said Lee Sang Hyun, an analyst at NH Investment & Securities Co. “Although China’s auto-market growth has slowed compared with a few years ago, it is still a rapidly growing market.”
Its size stood at 1.63 million units in 1988 but expanded up to 5.76 million units in 2005 and 13.5 million units in 2009, overtaking the United States as the world’s largest automobile market.
The carmaker’s annual sales in China surpassed 1 million vehicles last year for the first time, according to data compiled by Bloomberg. By comparison, it sold 640,698 units in South Korea and 720,783 in the United States. In EU and EFTA markets, the carmaker sold 422,930 vehicles in 2013, a drop of 3 percent over the previous year, according to data from industry body ACEA.
Hyundai automobiles move towards the paint shop at the Beijing-Hyundai plant
The fourth plant would have capacity of 300,000 cars a year, bringing Hyundai’s China output to as many as 1.51 million vehicles, according to the statement. Hyundai’s three existing car plants are located in Beijing. Its commercial vehicle business also has a new plant under construction in Sichuan, China.
The growth of the Chinese market, thereafter, has continued, with the annual sales of passenger vehicles there rising to near 18 million units last year.The yearly sales of passenger vehicles in China are expected to break the 20-million level by 2016.