Hyundai Motor Co. mulls building a fourth vehicle site in China to cater to growing demand in the country. Chairman Chung Mong-koo is set to sign an agreement Thursday with the government of Chongqing to review the possibility of locating a site in the city, Hyundai said in a statement. Hyundai is experiencing tougher rivalry in China as Toyota Motor Corp. and Nissan Motor Corp. have already managed to recover from Japanese product boycotts in 2012.
The South Korean carmaker is one of the companies seeking to produce and sell more vehicles in China. Lee Sang Hyun, an analyst at NH Investment & Securities Co. remarked that for Hyundai to increase or at least keep its market share in China, a decision to build a new site in country “would have been inevitable” for the carmaker. He quipped that while China's vehicle market growth has slowed, it remains a rapidly growing market.
Once built, the fourth site would be able to build 300,000 cars annually, increasing Hyundai's output in China to up to 1.51 million vehicles, according to the statement. Hyundai operates three vehicle sites in Beijing while its commercial vehicle business is currently building a new plant in Sichuan.
The South Korean carmaker saw its annual sales in China topped 1 million vehicles in 2013, according to data compiled by Bloomberg. It sold 640,698 units in South Korea and 720,783 in the US in the period. It also sold 422,930 vehicles in 2013 in in EU and EFTA markets.