Hyundai Motor Divests Chongqing Plant in China Amid Business Reorganization

SEOUL: Hyundai Motor Co., South Korea's leading car manufacturer, has announced the sale of one of its factories in China, marking a significant step in its business restructuring efforts in the world's largest automobile market. The decision aligns with the company's strategy to optimize its operations and improve profitability.

According to Yonhap News Agency, Hyundai Motor disclosed that its joint venture with China's Beijing BAIC Motor, Beijing Hyundai Motor, completed the sale of the Chongqing plant at the end of the previous year. The facility was sold to an industrial park developer based in Chongqing for approximately 296 billion won (US$221 million), as per the company's statement.

Opened in 2017, the plant, which has an annual production capacity of 300,000 units, was put on the market in June last year due to decreasing demand. "Hyundai Motor is trying to boost business efficiency in China and the sale is part of its efforts to improve profitability through the rationalization of production," a Hyundai Motor official stated.

Hyundai Motor's sales in China peaked at 1.14 million units in 2016 but have been declining since 2017, partly due to a diplomatic row between Seoul and Beijing over the deployment of a U.S. anti-missile system in South Korea. At its height, Hyundai Motor operated five plants in China but had to sell one of them, the No. 1 Beijing plant, in 2021, following a drop in demand.

In line with its ongoing business reorganization, Hyundai Motor reportedly plans to sell another facility located in Changzhou, a city in southern China.

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