Hyundai Motor, the nation’s largest carmaker, broke ground Friday to build its fourth car production plant in China in an effort to expand its annual production capacity to 1.65 million units by 2018.

The carmaker will complete the plant, which will have a maximum annual production capacity of 300,000 units, in Changzhou City, Hebei province by the end of 2016, the company said.

The plant will be able to produce 200,000 small vehicles in the initial stage and later increase the capacity, the company said.

Hyundai opted to build the fourth plant in Changzhou last year following a request from the Chinese government, which has driven the mega-development project for the capital region, covering Beijing, Tianjin and Hebei province.

The urbanization of Beijing, Tianjin and Hebei has been considered China’s third-largest economic development project after the Pearl River Delta and Yangtze River Delta.

“I am pleased that Hyundai Motor began construction of the new plant in Hebei province, which will become a new growth engine of the Chinese economy,” Hyundai Motor vice chairman Chung Eui-sun said in a ground-breaking ceremony. 


On the heels of the fourth plant, the nation’s top automaker will also begin construction of its fifth plant with the same capacity in the southwestern city of Chongqing in the latter part of this year.

Hyundai’s investments in China will continue, along with its plan to expand its production capacity to 1.65 million units by 2018, up from 1.05 million vehicles at present, the company said.

When the production capacity of the firm’s affiliate Kia Motors is combined, the capacity of the Korean automotive group in China will reach up to 2.7 million units by 2018.

The fast-growing Chinese market has turned into a battlefield of global carmakers amid the global economic downturn.

Volkswagen, the world’s largest carmaker, will expand its annual production capacity to 5 million vehicles by 2018. General Motors also plans to produce 2.9 million vehicles in China by 2017.

“China is the most important market for Hyundai Motor Group for sustainable growth,’’ an industry analyst said, pointing out that China is the world’s largest auto market.

The Korean automotive group, whose market share in China hovers around 10 percent, however, has faced tough competition from global rivals and the slowing Chinese economy has impacted on Hyundai Motor’s sales in China, with sales falling two months of this year. About 177,000 vehicles were sold, down 6.3 percent from the same period last year.

By Seo Jee-yeon (jyseo@heraldcorp.com)