Guangzhou Hyundai commercial vehicle project is grounded

China’s largest commercial vehicle project, Guangzhou Hyundai commercial vehicle, was grounded and its future remains unclear, Chinese media reported today.

“There are no signs that the project could possibly start by the end of this year,” said a worker at the planned project’s construction site. “No construction contract has been signed and we don’t know when the project will get started.”

Back in June 2005, Hyundai and Guangzhou Automobile Group signed Initial Cooperation Agreement on Guangzhou Hyundai Commercial Vehicles Project. Under the original plan, Guangzhou Automobile would invest $1.24 billion to start a joint venture with Hyundai by the end of 2005 and the joint venture would start production in 2007. To show their dedication to the project in Guangzhou, Hyundai halted its cooperation talks with Jianghuai Automobile group.

In 2006, Chung Mong Koo, the chairman of Hyundai Motor group, was arrested on charges of embezzlement. Many projects, including the Guanzhou Hyundai project, were halted as a result of this incident.

Both Guangzhou Automobile Group and Hyundai keep silent about the future of Guangzhou Hyundai Commercial Vehicle Project.

“The project is in difficulty now, but we are still trying to get it moving,” said a local official from Huadu District, where the project is located. Obviously, local government hopes the project would move forwards as expected.