Hyundai Motors Co. has said that it will build two new factories in China, its first new manufacturing infrastructure since 2012, as the South Korean auto company hopes for growth in the world’s biggest automobile market even as the economy of the country is slowing.
Hyundai has said that the factories, which are planned to start production in 2016 and 2017, will help the company to compete better with its rivals in the Chinese market, including General Motors and Volkswagen. Hyundai’s affiliate Kia Motor Corp has also announced its plans to expand production capacity at of its plants in Jiangsu province, from 300,000 now to 450,000 by 2016.
However, the automakers have not given the value of investments in the expansion process, but Hyundai has stated that the factories, which currently have a 300,000 production capacity, will help Hyundai and Kia Motors in maintaining their share of nearly 10% in the Chinese automobile market.
The duo stated that they are expecting to expand their joint production capacity in China alone to nearly 2.7 million vehicles by 2018. The expansion plans have come forward only a few days after the time when Toyota Motor Corp hinted that it could miss its financial target for 2014 due to a slowdown in Chinese economy.
Hyundai and Kia Motors’ plans about the expansion also give evidence that the two automakers are easing the unofficial suspension on capacity growth observed in the automaker’s business strategies due to quality concerns in the past two years. Construction of the Changzhou plant will start in second quarter of 2015, while that of Chongqing plant in third quarter of 2015.