Hyundai Motor Co said yesterday it had agreed to launch a US$400 million truck manufacturing venture in China with a local partner as it seeks further inroads in the world’s biggest auto market.
Hyundai Motor, South Korea’s largest automaker, said it signed an initial agreement with Chinese commercial vehicle manufacturer Baotou Bei Ben Heavy-Duty Truck Co and has set a sales target of 100,000 vehicles in China by 2014.
Under the deal, signed Saturday in Seoul, the two companies will invest a total of US$400 million to set up the 50-50 joint venture next year, Hyundai said. It will take over the Chinese company’s existing large truck business that can manufacture 40,000 vehicles a year.
Hyundai, which already makes passenger cars in China, said it will initially focus on heavy duty trucks in the new venture and gradually boost its investment to include what it described as a “full lineup of commercial vehicles.”
“The joint venture will initially launch a refreshed Baotou Bei Ben model and then launch a brand new model by 2012 with input from Hyundai’s modern technology and equipment, gaining competitiveness in the Chinese commercial vehicle market,” Hyundai said in a release.
“Entering China’s commercial vehicle market is essential in establishing Hyundai’s reputation as the most comprehensive car manufacturer in the world’s largest auto market,” Choi Han-young, vice chairman in charge of Hyundai’s commercial vehicle division, said at the signing of the deal, the release said.
“Our business in China will play a pivotal role in helping us achieve our global sales target of 200,000 units in commercial vehicles by 2013,” he said.
Other carmakers are also trying to expand their share of the Chinese market, in which Volkswagen, General Motors and Japan’s Toyota and Honda all have significant stakes.
The Nikkei Shimbun reported on Saturday that Honda Motor plans to build its fifth car plant in China to cope with mounting competition in the fast-growing auto market.
The new plant, with an annual capacity of 120,000 units, will boost Honda’s production in China by 20 percent to 730,000 units a year, the report said.
It will be built next to the existing factory of Honda’s Chinese joint venture Dongfeng Honda Automobile in the central city of Wuhan and is scheduled to be operational by 2011, the report said.
Initial investment in the project is estimated at ¥20 billion and ¥30 billion (US$220 million and US$330 million), it said.