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Hyundai said the factories, which will start
production in 2016 and 2017, would help it better compete with
rivals including Volkswagen and General Motors. Affiliate Kia
Motors Corp also said it would expand capacity at one of its
three Jiangsu province factories to up to 450,000 vehicles by
2016 from 300,000 now.
The automakers declined to give a value for the investments but
Hyundai said the factories - which are capable of producing
300,000 vehicles each - would help it and Kia maintain their
market share of over 10 percent in China.
The duo said they expect to have a combined China production
capacity of 2.7 million passenger and commercial vehicles by
2018.
Hyundai and Kia's expansion plans come a few days after
executives at Toyota Motor Corp told Reuters the Japanese
automaker was likely to miss its 2014 target due to a
faster-than-expected economic slowdown.
The plans announced on Tuesday also provide further evidence
that the two automakers are easing an unofficial moratorium on
capacity growth imposed about two years ago by Chairman Chung
Mong-koo due to quality concerns.
Hyundai said construction of its Hebei province plant, to be
located in city of Changzhou, will start in the second quarter
of 2015. The factory will be able to produce small vehicles by
the second half of 2016 and production will reach full capacity
by 2018.
Construction on the Chongqing plant will start in the third
quarter of 2015. That factory will make small and mid-sized
vehicles as well as vehicles specifically targeting China from
the first half of 2017, Hyundai added.
Hyundai currently has three factories in China.
People familiar with the matter said the automaker had initially
planned to build just one plant in southwestern Chongqing to tap
demand in that part of the country. It, however, increased the
number to two after the Chinese government wanted Hyundai to
build a plant in northeastern Hebei province as part of a
development plan for the area.
(Reporting by Hyunjoo Jin; Writing by Joyce Lee; Editing by
Miral Fahmy and Tony Munroe)
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