6 billion yuan to "save" Beijing Hyundai, Chinese and South Korean shareholders have no way out. On March 23, the reporter learned that Hyundai Motor Group plans to achieve its sales target of 520000 vehicles by 2025, its joint venture in China, Beijing Hyundai.
According to the plan, by 2025, Beijing Hyundai will launch a product layout including four cars, four SUV and two electric vehicles, and the focus of the product system will gradually shift from fuel vehicles to new energy vehicles, of which two exclusive pure electric models will be launched in China as early as next year. In addition, Beijing Hyundai will also increase its export efforts to form an export scale of 100000 vehicles in the future, and Beijing Hyundai's first MPV model, Kusto, will be sold to the Taiwan market.
"(now in the north) the two sides of the joint venture work together to fight a war, which may be full of willows and flowers." Luo Junmin, deputy secretary-general of the China Association of Automobile Manufacturers, said.
Joint capital increase of 6 billion yuan
Five days earlier, Beijing Automobile announced that BAIC and Hyundai Motor, a subsidiary of BAIC, had signed an agreement to increase the capital of Beijing Hyundai by 942 million US dollars (about 6 billion yuan) according to their respective shareholdings. According to the announcement, the capital increase is divided into two stages. By June 30, 2022, both shareholders will pay 50% of the capital increase, and the remaining capital increase will be paid by December 31, 2022. After the completion of this capital increase, the shareholding proportion of BAIC and Hyundai in Beijing Hyundai remains unchanged at 50% each.
"this capital increase provides a strong financial guarantee for our business such as introducing new products, increasing the layout of new energy vehicles, expanding exports, and so on." At that time, Beijing Hyundai said that the capital increase would not only enable Beijing Hyundai to cope with the subsequent electrified transformation, but also continue to strengthen the safety of Beijing's modern capital operation. "this is the confidence and determination of both shareholders to strengthen long-term cooperation."
In recent years, the decline of Korean cars in the Chinese market is obvious, and the market share is also shrinking. Data show that from 2017 to 2020, the cumulative sales of Hyundai in Beijing were 816000, 746000, 703000 and 502000 respectively. By 2021, Beijing Hyundai's annual wholesale sales fell sharply to 385000 vehicles, only 1/3 of the 1.14 million annual sales in 2016.
According to Hyundai Motor data, Beijing Hyundai lost 6.28 billion yuan in 2020 and 5 billion yuan in 2021.
"after years of being unprofitable, Beijing Hyundai is in dire need of external blood transfusions." In the view of industry insiders, with the falling prices of mainstream joint venture brands, the gradual rise of independent brands, and the upgrading of China's automobile industry, Beijing Hyundai has come to the edge of the industry, and both sides of the joint venture give financial support. Obviously, it is conducive to stabilize the morale of the army. "in view of the particularity of the Chinese market, what Beijing Hyundai can do so far can only wait for an opportunity."
According to the plan, Beijing Hyundai will challenge the sales target of more than 360000 vehicles this year to achieve preliminary "hemostasis".
Electrification becomes the top priority
In addition to enhancing liquidity and improving the financial situation of the joint venture, the 6 billion yuan capital increase will also be used in part for Beijing Hyundai's electrified transformation.
Hyundai hopes to achieve global sales of 1.87 million electric vehicles by 2030, equivalent to about 7 per cent of the market share, an increase of 234 per cent from its previous target of 560000 by 2025. This ambitious plan is underpinned by the launch of 17 all-electric models worldwide by 2030, including six new cars from Hyundai's luxury brand Denisys and 11 Hyundai models. Among them, the Hyundai brand pure electric model will launch three hatchback cars, six SUV, one light commercial vehicle and a new model. Hyundai is scheduled to start selling the IONIQ 6 this year, followed by the IONIQ 7 in 2024.
"We will increase the development of new energy products to achieve the full application of 48V light hybrid and all-hybrid C-class models and SUV models." Du Junbao, executive deputy general manager of Beijing Hyundai, revealed that in 2023, Beijing Hyundai will deliver a brand new electric car with the internal code name "OE", which is a cross-border product between the car and the SUV; at the end of 2023 or early 2024, it will launch the second pure electric model with the internal code name "CJ", and plans to export it to the European market. In addition, after CJ, the introduction of modern IONIQ (Ernie Krypton) 6 and 7 has been basically determined. "by 2025, Beijing Hyundai will maintain the layout of 20% of its products as pure electric models."
On March 2nd, Jang Jae-hoon (Jaehoon Chang), president and co-CEO of Hyundai Motor, unveiled a new electrification plan for Hyundai, which plans to invest about 95.5 trillion won (US $79 billion) in "future business" by 2030. About 19.4 trillion won ($16.09 billion) is spent on expanding electric vehicle production capacity, enriching charging networks and developing technology.
"the transformation of electrification is a back-to-back battle for modern Beijing." The aforementioned industry insiders believe that from European car companies led by Volkswagen to Toyota and Honda, their determination to increase the size of electrified products is also becoming more and more profound, and for "newcomers" like Hyundai, taking fewer detours is a shortcut to a long drive. "based on the electrification strategy of Hyundai Automotive Globalization, Beijing Hyundai may be able to make use of its strength in the later stage, but only if it can stop the decline in the past two years."
