Shanghai, April 8 (Gasgoo.com) Hyundai Motors announced today to open a $1 billion plant in China with partner Beijing Automotive, as part of its aggressive expansion effort to turn the mainland into its largest overseas market by 2010.
Beijing Hyundai Motor Company, a 50-50 joint venture between Beijing Automotive Industry Holding and South Korea's biggest carmaker, now operates two plants and aims to double capacity in China to 600,000 units by 2010, the companies said in a joint statement.
The company expects to sell 100,000 remodeled Elantras made at the new plant this year, pushing total China sales to 380,000 units in 2008, a 65% rise from about 230,000 last year. The new Elantras, one of the new models introduced by Hyundai into China in 18 months, will sell for RMB 99,800 ($14,250) to RMB 129,800. Hyundai is also planning to bring its high-end sedan Genesis to China in June, with a sales target of 1,500 units in 2008.
Industry analysts worry that Hyundai's projections are too optimistic and the new plant could lead to overcapacity. Hyundai's sales in China fell to 230,000 units last year from 290,000 in 2006 as the company failed to introduce any new models in one of the world's fastest growing markets.
Hyundai hopes to capture 10% of the China market along with its affiliate Kia Motors Corp by 2010, selling 1 million units in the country, where Kia Motors opened its second factory in December. The RMB 6.8 billion plant, which can make 300,000 vehicles annually, boosted Kia's total capacity in China to 430,000 units.