Hyundai’s 4th plant in China yet to receive Govt. approval

South Korean automakers Hyundai Motors had earlier announced plans to build a fourth plant in China. Hyundai and their affiliate Kia Motors were to use this plant based in the city of Chongqing to protect their market share in what is considered the world’s largest car market. But the plans have hit a roadblock.

Hyundai mistra chinaThe 4th Hyundai plant in China will be constructed at an investment of 1 trillion won (Rs 5,906 crores or $982 million). This fourth plant is vital for the growth of Hyundai as competitors Volkswagen, General Motors and Nissan Motor are growing exponentially.

However as extensively as the new plant is being planned, various road blocks have come to the fore putting a spanner in the works. A conflict between China’s central government and provincial government of Chongqing has delayed the receipt of final approvals putting plans of the new plant on a back foot.

It is estimated that both governments could be taking up the issue when they come together at the summit meeting in Seoul early next month. These differences have arisen as the Chinese central government wants Hyundai to set up this new plant in Cangzhou city in eastern Hebei province and not in Chongqing as was originally planned. These are the same sentiments projected by Hyundai’s Chinese partners – Beijing Automotive Industry Holding and the city of Beijing where Hyundai Motors have three existing plants.

Noting amplified sales in the Chinese markets, Hyundai Motors view Chongqing as a prime position for their expansion plans and hence are eager to push for permission to set up this fourth plant at the same venue. The auto major expects to see total annual capacity of 300,000 units at the Chongqing plant which is their first overseas investment since 2012.

via Yonhapnews