Hyundai Motor Group confirmed it plans to begin construction of two new car plants in China in 2015, in addition to the three factories it already operates in the country.
The two facilities, each with annual production capacity of 300,000 units per year, are due to come on stream in 2016 and 2017. Affiliate Kia Motors also plans to expand capacity at its factory in Jiangsu province from 300,000 to 450,000 units a year.
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Construction of the first Hyundai plant, in Changzhou in Hebei province, will begin in the second quarter of 2015. It is scheduled to begin production of small cars in the second half of 2016.
Construction of the second plant, in Chongqing city, is scheduled to begin in the third quarter of 2015. It will produce small and medium-sized vehicles, including models specifically designed for China, from the first half of 2017.
The additional investment will give Hyundai-Kia a combined production capacity of 2.7m units a year in China by 2018, up from 1.95m now. Hyundai’s capacity will increase from 1.21m to 1.81m while Kia’s capacity will rise from 740,000 to 890,000 units.
The new facilities will allow Hyundai to compete more effectively with leading automakers such as VW and GM and to at least maintain its market share in China at around 10% by 2018.
GM recently announced plans to spend US$12bn in China by 2017 and Volkswagen US$22bn by 2018.
