HYUNDAI Motor Co yesterday said it aims to make more China-only and environment-friendly cars at two new Chinese plants, as it strives to fend off competition from Chinese rivals and slowing growth in the world’s biggest auto market.
The plans are part of a strategy announced on the opening of the South Korean automaker’s fourth Chinese factory, which will be followed by a fifth plant next year.
Hyundai and sister Kia Motors Corp, which together rank third in China sales, saw their combined market share fall to 8 percent this year, hitting their lowest since 2007 as domestic rivals won customers with cheaper sport-utility vehicles.
To boost sales capability, Beijing Hyundai — a joint venture with domestic peer BAIC Motor Corp — replaced its head earlier in October as part of a reshuffle of China executives.
Hyundai said its new plants will each have annual production capacity of 300,000 cars, raising total capacity in its biggest market by about half to 1.81 million cars. Including Kia’s output, total capacity would be 2.7 million.
“We will accelerate our efforts to achieve a market share of more than 10 percent again with the (factory) opening,” Hyundai said in a statement.
China’s passenger car market is set to grow 1 percent in 2017 versus 10 percent this year, Hyundai said, citing data from China’s State Information Center. Tax breaks for small-engine cars, which boosted 2016 sales, will expire at the end of December.
Hyundai said its new plants will build models of varying sizes to compete with low-cost domestic rivals. It aims to sell a China-only SUV from as early as next year, with more SUV models planned.