Tuesday, June 21, 2005

Hyundai signs with Guangzhou

by Brian Turner

South Korea’s Hyundai Motor on Tuesday signed a preliminary agreement with Guangzhou Motor Group of China to cooperate in a joint venture to manufacture commercial vehicles.

The $1.24 billion project is meant to satisfy what Hyundai called an “explosive” demand for commercial vehicles in China. In anticipation of an expanding infrastructure and the Olympic Games to be held in Beijing in 2008, Hyundai predicts that the demand for trucks and buses will increase to 3.5 million units per year by 2010.

Hyundai is already one of the top vehicle sellers in China, but its aim is to increase the number of its vehicles made in China to one million units per year, increasing the share of its production in China to one-fifth of its total output. In the first quarter of 2005, Hyundai sold 56,100 vehicles in China as Beijing Hyundai Motor.

That made that joint venture the biggest seller of passenger cars in China for the quarter. In the newly announced joint venture with Guangzhou Motor, each party will make an initial investment of $430 million. Guangzhou Motor is currently already involved in joint ventures with both Honda and Toyota to manufacture motor vehicles in China.

 

 

 

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