Beijing Hyundai sold Chongqing factory for 226 million USD, less than half of its initial listing price

On January 17, Hyundai announced that Beijing Hyundai had sold its Chongqing factory to Chongqing Liangjiang New Area Yufu Industrial Park Construction Investment Co., Ltd. for 1.62 billion yuan (226 million USD) at the end of last year, a figure less than half of its initial listing price previous year, as reported by Yonhap News Agency.

The Chongqing factory, the fifth complete car manufacturing plant established by Beijing Hyundai in China, was touted as the company’s “most advanced” factory. Construction began in 2015, and the factory officially commenced operations in August 2017. Covering an area of 1.87 million square meters, the factory had a total investment of 7.7 billion yuan (1.07 billion USD) and an annual production capacity of 300,000 vehicles. However, due to various reasons, it ceased operations in December 2021.

Initially, the Beijing Hyundai Chongqing factory was listed for sale on August 11, 2023, with a transfer base price of 3.68 billion yuan (513 million USD). However, the sale was not completed by the deadline. After the unsuccessful auction, the factory was relisted on September 27 with a reduced base price of 2.58 billion yuan (360 million USD), a reduction of 1.1 billion yuan (153 million USD). Subsequently, it underwent a third listing with a base price of 1.917 billion yuan (267 million USD) until it was finally sold for 1.62 billion yuan (226 million USD).

Hyundai Motor stated that this sale is part of an effort to reasonably adjust the operational model of its factories in China to enhance efficiency. Industry insiders believe that the Chongqing municipal government primarily led the sales process. Yonhap News Agency also mentioned that Hyundai Motor might consider selling its Changzhou factory.

According to public data, Hyundai Motor’s sales in China peaked at 1.14 million vehicles in 2016. However, since facing marketing setbacks in China in 2017, the company sold its first factory in Beijing in 2021. This sale has reduced Hyundai’s manufacturing presence in China from five to three factories, including the second and third Beijing factories and the Changzhou factory.

Beijing Hyundai’s 2023 sales data showed a total annual sales volume of 257,000 units, a year-over-year increase of 2.8%. Additionally, in 2023, Beijing Hyundai’s export volume exceeded 10,000 units. Furthermore, Beijing Hyundai announced the launch of the eleventh-generation Sonata and fifth-generation Shengda in 2024 and plans to develop over six pure electric and plug-in hybrid products within the next three years.

Sales data indicated that the new Elantra surpassed 110,000 units, a year-over-year increase of 19%. The SUV Gemini (fifth-generation Tucson L, upgraded ix35 Mosa) reached 100,000 units, a year-over-year increase of 2%, with the upgraded ix35 Mosa achieving a monthly sales figure exceeding 5,000 units.

The current factory sales are mainly due to Beijing Hyundai’s declining sales in the Chinese market, resulting in overcapacity and shrinking business. Yueda Kia, another Sino-Korean joint venture, also has the same problem. To alleviate the problem of overcapacity, Yueda Kia exported half of the cars produced outside China in 2023 to cope with the decline in demand in the Chinese market.

Source:iTHome