Hyundai Allowed to Produce Cars in China

Seoul, Korea October 14, 2002, writing for the Korean Times Kim Ki-tae reports that

Hyundai Motor has received a green light from the Chinese government to build vehicles in China.

The automaker announced yesterday that the Chinese authorities have endorsed its application to produce automobiles through its joint corporation with Beijing Automotive Industry Holding Co.

The approval is expected to be a springboard for Korea's biggest carmaker to participate in the world's most populous market. The joint corporation, named Beijing Hyundai Motor, will vie with other three competitors, including Dongfeng Citroen Company, Shanghai GM Automotive Company and China First Automotive Company in which Volkswagen has an interest.

Beijing Hyundai Motor will produce 2,000 units of the EF Sonata model this year. According to the plan, the production will rise to 30,000 units in 2003, 200,000 units in 2005 and 500,000 in 2010.

Hyundai Motor and Beijing Automotive Industry Holding will each chip in half of the required resources for the joint project.

Hyundai plans to invest a total of $430 million in the new production line by 2005, including $100 million worth of initial investment, and increase the combined investment to $1.1 billion by 2010.

The Beijing City government plans to designate Hyundai's Sonata as the standard vehicle for the city's 67,000 taxis.

Hyundai plans to accompany domestic car component producers to the Chinese market to help them build up local partnerships. The automaker is also to set up a research and development center in China.