Hyundai Motor Group is putting its second factory in Beijing for sale as part of a broader effort to adjust its China strategy, according to foreign media reports. Hyundai will shift its focus to electric cars and luxury models, hoping to reverse years of sluggish sales in the world's largest car market.
South Korea's largest carmaker is in talks with potential buyers to sell the second plant in Beijing, which produces Sonata (Sonata), (Avante) and Tusheng (Tucson) SUV, according to people familiar with the matter. Hyundai is understood to be in talks with several Chinese electric car manufacturers about selling factories, including Xiaomi. On September 1, Xiaomi officially completed its industrial and commercial registration, and Xiaomi also officially entered the electric vehicle market. Xiaomi is headquartered in Beijing, which makes it more reasonable to buy Hyundai's second factory in Beijing.
Hyundai's first factory in Beijing is in the final stages of its dream of selling to Chinese electric car start-ups. The sale of Hyundai's factory comes amid a further decline in its market share in China because of a surge in demand for luxury models from local affordable brands and European carmakers. Last year, Hyundai sold about 660000 vehicles in China, less than half the 1.79 million sold in 2016, resulting in a loss of 2 trillion won ($1.72 billion) and Hyundai's market share in China fell to 3.5 per cent.
Hyundai is still considering selling the plant in October after failing to get approval to increase the production line of electric vehicles at the plant in Changzhou, according to sources. Since entering the Chinese market, Hyundai has operated five passenger car production plants in China.
Hyundai Motor has also recently carried out structural adjustments in China, transferring more than 20 manager-level staff back to the country. However, Hyundai stressed that it will not completely abandon the Chinese car market, which sells 25 million vehicles a year. In order to regain its former glory, Hyundai is now focusing on SUV and luxury models, and has launched a variety of zero-emission models, such as the Nexo, Ioniq 5, Genisse G80 and so on.
