Hyundai to Build Third Plant in Beijing

While Toyota Motor Corporation (NYSE: TM | Quote | Chart | News | PowerRating) and Honda Motor Co., Ltd. (NYSE: HMC | Quote | Chart | News | PowerRating) were suffering from depressive sales in the US, Hyundai became the world's fourth largest carmaker in the first half of 2009, with sales topping that of Ford Motor Company (NYSE: F | Quote | Chart | News | PowerRating).

In the fast-growing Chinese market, Hyundai also had a satisfying performance. Hence, its CEO Chung Mong-koo came to China again. On November 12, he disclosed when receiving an interview that Hyundai planned to build the third plant in the country with a production capacity of 300,000 vehicles per year. The plan was proposed for Beijing Hyundai Motor Company, which already has two like plants.

In the first ten months, Hyundai's sales topped 600,000 vehicles in the Chinese market, according to the China National Passenger Vehicle Association (CNPVA). The company has no choice but to build new plants in a bid to enlarge its market share in the country.

In October, Hyundai's sales of Accent, Sonata, and Elantra respectively hit 4,581 vehicles, 7,790 vehicles, and 8.673 vehicles in the US, citing the data released by Hyundai Motor America.

However, the situation was totally different for the South Korean carmaker in the high-end sedan field. Genesis was designed by Hyundai to challenge BMW 5 Series, Benz E Series, and Lexus GS Series. The company's low-price strategy has bolstered up its success in the economic sedan and medium-end car field. But, to edge into the top five global carmakers, it must build up high-grade brands.

In 2007, Hyundai displayed its Genesis-branded conception car in the New York International Auto Show. Its sales targets for the car model were 55,000 vehicles in 2008, hoping that Genesis could become South Korea's Lexus.

However, the car model has not made miracles in the US, an important battlefield for Hyundai. From June to October 2009, Genesis' highest monthly sales were only 2,316 vehicles. The promotion of the high-end sedan has not changed the unbalance between Hyundai's sales and brands.

Neither did the third plant the company planning to build in China. Although Hyundai's Sonata sold well in its base camp, the medium- and high-grade car model had lost its attractiveness to Chinese consumers and was remodeled repeatedly in the country.

Till August 10, when Moinca, based on the platform of Sonata, debuted on the market with a price range from CNY 114,800 to CNY 139,800, it had completely become a medium-end car model.

(USD 1 = CNY 6.83)

Source: dycj.ynet.com (November 19, 2009)

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