South Korea’s largest automakers Hyundai Motor and Kia Motors are expanding production capacity in China, the world’s largest vehicle market, with the aim of meeting growing demand for sport utility vehicles, eco-friendly cars and infotainment services.
Hyundai and Kia said they plan to secure production capacity of a total of 2.7 million units -- 1.8 million units from Hyundai and 890,000 units from Kia -- in China by 2017 through its plants in Beijing, Cangzhou and Chongqing.
Hyundai Motor Group Chairman Chung Mong-koo (third from left) poses for a photograph to mark the production of Verna at the company’s plant in Cangzhou, China, Oct. 18. (Hyundai Motor)
“Hyundai’s plan is in line with the global trend of expanding production capacity in China to satisfy rising demand for compact SUVs, green cars and connectivity services among young consumers,” a Hyundai official said.
According to industry data, SUVs are the best-selling car segments in China, accounting for around 40 percent of total car sales this year, a sharp rise from 11.5 percent in 2010.
Hyundai said this is because young Chinese consumers are increasingly opting for more practical and spacious cars rather than luxury cars. SUVs are also an ideal option for the poor road conditions of inland areas where city development is speeding up.
Hyundai Motor and Kia Motors are currently selling nine SUV models including Hyundai’s compact SUV Tucson and Kia Motors’ Sportage. The proportion of Hyundai and Kia’s combined SUV sales in the Chinese SUV market has risen to 35 percent this year from 27 percent last year, the company said.
Apart from SUVs, Hyundai is also betting on eco-friendly cars in China where the government is strongly pushing electric cars to reduce carbon emission as well as to boost the green car industry.
Hyundai began to produce its new Sonata Hybrid at its Beijing plant from May and Kia also started the production of its new K5 from August. They plan to unveil a total of nine green cars including hybrid, plug-in hybrid, electric and fuel-cell cars by 2020.
The Korean automakers also aim to focus on information technology and connected cars to lure more young Chinese consumers.
“We plan to expand infotainment services such as Apple’s CarPlay and Baidu’s Carlife to allow drivers to conveniently use diverse services such as phone calls, texting and music while driving,” a Hyundai official said.
By Shin Ji-hye (
shinjh@heraldcorp.com)
