New factory in China to play role in group’s sales target of 7 million units worldwide


Hyundai Motor’s third manufacturing factory in Beijing has launched a pilot production of facelifted versions of the Avante sedan, company officials said Thursday.

“While the plant has already started its operation, an event to celebrate the completion of construction is scheduled to be held later this month,” a Hyundai spokesman said.

He said the vehicle models to be rolled out would include the Avante HD, dubbed Yue Dong in China, and the Avante MD, called Lang Dong.

“Both of them will be greater in length than original models to meet the needs of Chinese consumers.”

The company’s third plant in China holds significance in terms of Hyundai Motor Group chairman Chung Mong-koo’s resolution toward a combined sales target of 7 million vehicle units at home and abroad this year.

In an earlier message to his staff, Chung said the automotive group raised its 2012 sales target by 400,000 vehicles from its sales of 6.6 million units in 2011.

In a bid to achieve the 7 million target for Hyundai-Kia vehicles, he said, the group has to keep up with fast-changing global trends by setting up an organized cooperation system for better communication among production facilities and sales corporations worldwide.

Chung has said Hyundai Motor together with its affiliate Kia Motors Corp. became one of the world’s top five car makers with combined sales of 6.6 million vehicles in 2011.

“Both have pulled off double-digit growth for three years in a row since 2009 but the rate is expected to sink to 6.1 percent this year.”

The chief stressed that growth of the car industry is forecast to slow down and competition will be fiercer this year. “We have to establish a foothold as one of the global top companies with more solid management.”

He also said that the automotive group’s globalization plan is on track to increase its presence in most of the world’s major automotive markets.

“Beijing Hyundai Co.’s third plant and an assembly line in Brazil will begin mass production later this year,” he said. “They will complete our global production network with 30 production facilities in nine countries.”

He also commented on the importance of research and development to satisfy demand of customers and the market. “The group will increase the number of experts and expand investment in developing environment-friendly technologies.”

Chung is scheduled to deliver another message in the coming celebration event for completion of the third Beijing factory.

Hyundai Motor has continued to increase its share since it established the Beijing Hyundai corporation and factories a decade ago.

Beijing Hyundai offers six models: the Sonata, Avante (Elantra), Tucson, Sonata NFC, Accent and Elantra Yuedong.

According to statistics, the cumulative sales of Beijing Hyundai have increased to more 1.5 million, sales income over 150 billion yuan (230 million) and total tax to 16.5 billion yuan since Beijing Hyundai was established. Some 100,000 jobs were also created through the brand.

Beijing Hyundai also lays claim to revitalizing Beijing’s manufacturing industry, contributing to the capital’s economy and promoting social harmony.

Hyundai and Kia have been successful in expanding their market share in China, together taking nearly 10 percent. GM has about 12 percent of market share.

Volkswagen holds the top position in China with a market share of about 18 percent.

Hyundai plans to begin producing a small vehicle specially designed for the Chinese market at the new plant during the second half of 2012, and other models designed for the market will be added to the plant in the future.

In late June, Kia Motors broke ground at the site of its new third plant in an eastern coastal province of China, as the company aims to double its production capacity in the world’s largest automotive market.

On the extension of Kia’s localization strategy, the new factory will be in charge of manufacturing Chinese consumer-oriented sedans to fully reflect customers’ needs, company spokespeople said.

The nation’s second-largest automaker is poised to add a variety of new lineups to the new factory’s production list in the future according to the change in market demand in China.

The project of Kia, an affiliate of Hyundai Motor, is to complete construction on the new factory by the first half of 2014 in order to produce 300,000 units annually in addition to the first and second factories, which are all located near each other in Yancheng District Economic Development Zone in Jiangsu province.

Currently, the Chinese factories of Hyundai and Kia have a combined annual production capacity of 1.13 million units ― 700,000 units at two Hyundai factories and 430,000 units at two Kia factories.

The affiliated automakers expect to see their capacity grow by 26.5 percent, or 300,000 units, to 1.43 million units as Hyundai completed the construction of its third Chinese plant.

By Kim Yon-se (kys@heraldcorp.com)