Hyundai Mum on Reports of Fourth Plant for China

A Hyundai spokesman says the automaker still is reviewing expansion plans for China, but declines comment on news reports that a fourth plant will be built in Chongqing, China, for its Beijing Hyundai Motor joint venture.

The reports indicate a decision has been reached and a signing meeting will take place Feb. 26 between the Chongqing government and Beijing Hyundai, with Hyundai Automotive Group Chairman Chung Mong-koo participating.

The spokesman in Seoul says the Hyundai office there has not been advised of any meeting or pending agreement with the Chongqing government for a fourth plant in China.

But a source in Beijing familiar with Beijing Hyundai operations confirms the JV will build a fourth plant, and several locations are being considered.

“The new plant is still under negotiation and I would recommend that you do not cite it as being at Chongqing…the timing has not been decided,” the source tells WardsAuto.

The Beijing source says reports that Chung will sign an agreement in China are not correct.

Beijing Hyundai, a 50-50 JV between Hyundai and Beijing Automotive Industry Group, already has three plants in Beijing with combined maximum capacity of about 1.1 million units and are operating at capacity.

Chongqing is home to Changan Ford Mazda, a 50-50 JV between Ford and Changan Automobile Group.

A new plant for the SAIC-GM-Wuling JV between Shanghai Automotive Industry, General Motors and Liushou Wuling Motors is scheduled to open there in 2015.

Hyundai spokesmen previously have said there is a freeze on further expansion while the automaker consolidates its position and focuses on quality and upgrading the brand. However, the competition is not standing still, and with GM and others expanding in China, sitting tight with current capacity could cost the JV market share, analysts believe.

In 2013 Beijing Hyundai sold 1.03 million vehicles in China, up 24% year-over-year. Its sister company’s Dongfeng Yueda Kia Motor JV sold 546,000 vehicles, a gain of 14%.

Chinese news media, citing Hyundai sources, indicated a fourth Hyundai plant would be located in Chongqing. Reports about the proposed site first surfaced in September 2012.