Hyundai-Kia Automotive Group is aiming to grow at twice the market rate next year in China.
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The company, whose two main China units are Bejing Hyundai Motor and Kia Motors, expects its China sales to grow 25% next year to around 1m units, up from an estimated 800,000 this year, Noh Jae-man, president of Beijing Hyundai, told Reuterson Thursday.
Most analysts expect China’s broader auto market, on track for record sales this year under government incentive programs, to grow between 10-15% in 2010.
Hyundai-Kia became the maker of the top selling foreign car brand in China in just seven years, finding a niche between domestic brands known for cheap prices and foreign brands such as Volkswagen and Toyota, known for their quality but also for being expensive.
Beijing Hyundai Motor, a joint venture between Hyundai Motor and Beijing Automotive Industry Holding (BAIC), is aiming to sell 670,000 cars next year, up 17.5% from a projected 570,000 in 2009, Noh told a media briefing.
Kia, meanwhile, aims to sell 330,000 cars in China next year, 43% more than an estimated 230,000 in 2009, he added.
Current government economic stimulus measures include aggressive cuts in sales tax for small cars and subsidies for buyers in rural areas.
“I hope the stimulus policy will continue next year and the market also expects this to be extended,” Noh said.
To meet its aggressive growth targets, Beijing Hyundai is planning its third car manufacturing plant in China, which will lift the company’s capacity by 50 percent to 900,000 vehicles.
Hyundai’s investment in China totaled $1.5bn to date and the new plant to be built in Beijing will cost roughly $800m, he added.
The company is reviewing its production capacity in India but would not confirm whether it will build a third plant there soon.
“It’s clear we are approaching the limit of our manufacturing capacity. The India market is growing and overseas demand for the Indian product is growing so I think that’s now undergoing serious review but we don’t have any plan to make public at this time,” a Hyundai executive told Reuters.
