South Korea's largest car manufacturer Hyundai Motor said on Monday it will build a production plant in China together with Beijing Automotive Industry Holding Co to have greater access to one of the fastest growing markets in the world.
Representatives of both companies signed a contract in Beijing to set up a 50-50 joint venture company for passenger cars to be called Beijing-Hyundai Motor Company, Hyundai said in a statement issued in Seoul. The contract followed a memorandum of understanding signed last February.
Hyundai intends to invest up to US$1.1 billion in the new company by the year 2010, it said.
The car maker would make an initial investment of US$100 million and increase the investment up to US$430 million by 2005.
The plant, with a projected annual capacity of 200,000 units by 2005 and 500,000 units by 2010, is scheduled to go into operation in the second half of this year.
Hyundai Motor Co said, it hopes to become one of the global top five automakers by successfully penetrating the Chinese market, "which has a big potential of its total volume of 50 million cars by 2010."
The new plant will be located in the vicinity of Beijing.
It plans to start production of Hyundai's passenger sedans EF Sonata and Elantra XD.
It also decided to jointly build a part production plant with its South Korean domestic partners in cooperation with Chinese local partners, although details have yet to be finalized, Hyundai said.
"This contract comes from the mutual understanding of the fact that Hyundai Motor and Beijing Automotive expect the Chinese auto market to expand dramatically following China's entry into the WTO and with the Olympic Games due to be held in Beijing in 2008."
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