SEOUL– South Korea’s top carmaker Hyundai Motor Co. and China’s Beijing BAIC Motor will inject over 1 trillion won (US$825 million) into their joint venture to enhance the competitiveness of its electric car making amid sluggish sales, company officials said Sunday.
They will increase the capital stock of Beijing Hyundai Motor by about 1.2 trillion won, with each shouldering half of the planned investment into the 50-50 joint venture, according to the officials.
Half of the planned investment will be completed by end-June, with the remainder injected by end-December.
The move is aimed at enhancing the stability of its financing capacity and also the competitiveness of its electric car manufacturing capability, the officials said.
The decision comes as Beijing Hyundai, launched in 2002, is struggling with ballooning losses from falling sales in China.
Beijing Hyundai reported about 1.2 trillion won and 950 billion won in losses in 2020 and 2021, respectively. Its car sales in China have been on a sharp decline since peaking at 1.14 million units in 2016. Last year, it sold 385,000 cars in China.
Hyundai Motor operates four factories in China, with their combined annual production capacity reaching 1.35 million units.
Amid falling sales in China, Hyundai Motor has suspended the operation of its factory in the southwestern city of Chongqing since late last year as part of efforts to enhance production efficiency.
Last month, Kia Corp., a sister company of Hyundai Motor, and Jiangsu Yueda Group also announced a plan to inject some 1.1 trillion won into their struggling joint venture in China.
Industry data showed that Hyundai Motor and Kia saw their combined market share in the passenger vehicle market in China fall to 1.7 percent in 2021 after reaching 7.35 percent in 2016.
Source: Yonhap News Agency