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Hyundai Motor Company to Become China's Largest Car Manufacturer

26 January 2000

Hyundai Motor Company to Become China's Largest Car Manufacturer

    FOUNTAIN VALLEY, Calif., Jan. 26 -- Hyundai Motor Company is
set to become the largest car manufacturer in China following the announcement
in Beijing of a joint venture agreement with the Jiangsu Yueda Group.
    A passenger car production facility with an annual capacity of 300,000
units will be developed jointly by Hyundai and Kia, which already has an
agreement with Jiangsu Yueda.  The existing facility will be developed to
produce 150,000 units per year by 2002 following the investment of
US$ 300 million.  Further development will take production on to 300,000 units
per year.
    The current Chinese passenger car market of one million units is expected
to rocket to as high as 50 million units by 2010 -- three times the current
level of the United States market -- and Hyundai-Kia-JYG will become China's
leading manufacturer.

    Management responsibility
    Under the deal Hyundai has acquired a 20 per cent stake of Yangcheng
Yueda-Kia Motors Co. Ltd., to give a 50-50 split in ownership between Hyundai-
Kia and JYG.  Hyundai-Kia will assume management responsibility for the new
joint project and the equity share will change to 51-49 in the company's favor
when Chinese law allows.
    The new company will trade under the name Jiangsu Hyundai-Kia Yueda Motor
Co. Ltd.
    The new company will work under current Chinese regulations regarding
automobile manufacture and Chinese car-part production requirements in order
to assist the development of the Chinese automobile industry.  Currently
automobiles must have 40 per cent local content.

    Hall of the People
    The new agreement was signed in The Hall of the People in Beijing by
former Chinese Communist Party vice-chairman Honh Hak-Ji, Hyundai-Kia Chairman
Chung Mong-Koo and Hyundai Motor Company President Lee Kye-Ahn.
    Chairman Chung said the investment in the Chinese deal would play a major
role in Hyundai-Kia's global development and target to be producing four
million units per year by 2010.  Entry into the Chinese market was essential,
he said, for Hyundai to ensure its independent survival as one of the world's
top automakers.

    Northeast coast
    The joint-venture factory is located in Yangcheng which is on China's
northeast coast and is expected to produce 50,000 units this year and
currently employs 500 people.  Under the agreement the factory, which has been
building the Kia Pride will produce a new sub-compact passenger car from the
Hyundai-Kia range.

    For further information please contact the Hyundai Motor Company Overseas
Public Relations Team.  Stephen Kitson, General Manager, tel. (82) 2746 6110,
e-mail s.kitson@hyundai-motor.com or Park Chan-Keun, Manager, tel.
(82) 2746 6111, e-mail chanpark@hyundai-motor.com