SOUTH KOREA REPORT
The company sold the plant to Chongqing Liangjiang New Area Yufu Industrial Park Construction and Investment Group, which is owned by the city of Chongqing, and its affiliate will use the plant as a production base for electric vehicles.
Hyundai Motor Company has sold its finished car plant in Chongqing, China, to a Chongqing government-owned company for 1.62 billion yuan (about 33 billion yen, $222 million) in December 2023. Hyundai Motor is rushing to restructure its Chinese business, which has suffered from sluggish sales, and concentrate its management resources in the U.S. and Southeast Asia.
Source: The Nikkei
PSR Analysis: As mentioned in the July 2023 issue of PowerTALK News™, Hyundai Motor’s strategy in China is changing. China is rapidly shifting to EV, and Chinese car brands are growing rapidly. This has led to poor sales in the Chinese market for Hyundai Motor, and Hyundai Motor is trying to shift its resources to Southeast Asia and North America, switching to a strategy of focusing on luxury cars in China.
This situation is not limited to the automobile industry; similar situations can be seen in other manufacturing industries. South Korean products have grown due to a good balance between price and quality. The market view is that the cost is not as high as Japanese or European products, and the quality is better than that of Chinese products.
However, the improvement in the quality of Chinese products and the low price of Chinese products due to mass production are eliminating these advantages for South Korean products. To respond to such rapid changes in the market, Hyundai Motor is rapidly reviewing and optimizing its strategy. Hyundai Motor’s decision should be seen in this light. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
