Shulou(Shulou.com)11/24 Report--

CTOnews.com, October 12 (Xinhua) in order to improve its business in China, Hyundai Motor will produce cars for foreign brands for the first time, which has been interpreted by the industry as a circuitous strategy adopted by Hyundai Motor to "turn around" in the Chinese market, according to the Korea Economic Daily.

Hyundai and BAIC have agreed to produce Arcfox electric cars at a factory in Beijing Hyundai Motor Co., Ltd., and are discussing details, according to industry sources in Seoul and Beijing. It is said that at present, the operating rate of Hyundai automobile factories in China is less than 50%.

"this partnership shows that Hyundai has not given up on the Chinese market," a source said. "Hyundai is trying to rebuild the bridgehead of expansion in the country by setting up a production line for electric vehicles."

In fact, Hyundai had five factories and an annual production capacity of 1.6 million vehicles at the peak of the Chinese market, but it went from bad to worse after the THAAD scandal in 2017, and its market share in China has fallen from about 7% at its peak to less than 1%, while Beijing Hyundai also reported an operating loss of 800 billion won (CTOnews.com Note: about 4.352 billion yuan) in 2022.

Foreign media believe that Beijing Hyundai may make use of the spare capacity of the third factory in Beijing to be responsible for the "internal production" (MIP made in plant) of the design, production and quality control of Polar Fox.

Foreign media reported that the South Korean car originally planned to introduce its IONIQ model to China, but after a visit to China, Hyundai executives found that China's domestic market has almost cost local brands all over the world, and Hyundai has been increasingly marginalized. They postponed the plan because of marketing strategy.

As a result, Hyundai Motor Group is trying to negotiate with its joint venture partner BAIC on the production of polar fox cars, in an attempt to establish a bridgehead to re-challenge the Chinese market by building an electric car production line.

"this production is a step to ease financial difficulties," a source in Beijing said, adding that the company planned to build its first electric car production line there.

At present, the effect of Hyundai's strategic adjustment in China has begun to show. In the first eight months of this year, Hyundai produced and sold 157000 vehicles in China, up about 9 per cent from a year earlier.

At the CEO Investor Day held in June, Hyundai President Zhang Zaixun said he would consolidate capacity at two Chinese factories and open up new export markets at the same time.

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