Hyundai has reached an agreement over terms for a $557 million joint venture with China’s Sichuan Nanjun Automobile Group. The venture will be an equal share partnership between the South Korean and Chinese carmakers that aim to manufacture 160,000 vehicles per year by 2013.
The operation will be based in Ziyun in China’s southwest province of Sichuan and will get underway in late 2011. Talks began earlier last year with Hyundai agreeing to an initial proposal for the joint venture in October.
The South Korean automaker is targeting 73,000 car sales in China this year, and it expects to raise the number to 160,000 by 2015, as demand in China’s swelling auto market soars.
China’s Commercial Car Market Soars
Already the biggest in the world, China’s commercial car market is expected to grow by a further 5.2 million units by 2015. Hyundai is currently the fifth-biggest carmaker in the world, and this new joint venture will position it as one of the major players in the burgeoning Chinese auto industry.
The South Korean carmaker has another joint venture with Beijing Automotive Industry holding Corp, which has two existing manufacturing plants and aims to begin production next year. ?
Key Players – South Korea Automotive Industry
- Asia Motors (passenger cars)
- Hyundai Motor Company (passenger cars, SUVs, vans, commercial vehicles)
- Kia Motor Company (passenger cars, SUVs, vans, commercial vehicles)
- GM Daewoo (passenger cars, commercial vehicles)
- SsangYong Motor Company (passenger cars, commercial vehicles)
- Renault Samsung Vehicles (passenger cars)
- Oullim Motors (sports cars)
Key Statistics – South Korea Automotive Industry (source: IHS Global Insight)
- South Korean automakers posted an increase in sales of 10.7%, selling 644,189 units from March to April 2011.
- Domestic sales in April totaled 126,270, an increase of 2.7% compared to the previous year.
- Hyundai’s global sales rose by nearly 50% to 380.647 units.