On Wednesday, South Korea’s Hyundai Motor Co. declared that it has commenced the process of selling one of its plants in China, part of its business reorganization strategy in the biggest automotive market globally, due to declining demand.
Since 2017, Hyundai has been struggling with weak sales resulting from the diplomatic clash between Seoul and Beijing concerning the installation of the Terminal High Altitude Area Defense missile system in South Korea.
In 2019, to improve sales, Hyundai started reorganizing its Chinese operations by re-adjusting production in its four plants in the country. The company also introduced some localized models, yet it did not lead to a resurgence in sales.
“We will focus on maximizing profitability through the readjustment of production facilities in China. But so far, the buyers and timetable have yet to be established,” Hyundai stated in a press release.
At its peak, Hyundai operated five plants in China, but it sold one of them, the No. 1 Beijing plant, in 2021.
The Chongqing plant is reportedly being sold for 3.68 billion yuan (US$505 million).
kyongae.choi@yna.co.kr
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