Beijing Hyundai's Chongqing factory listed for sale at reduced price

Beijing (Gasgoo)- Beijing Hyundai's Chongqing factory has been listed for sale on the China Beijing Equity Exchange at a transfer base price of 2.58 billion yuan, encompassing land use rights, above-ground structures, and related assets.

Photo credit: Beijing Hyundai

A significant portion of the assets being transferred, particularly the movable property, is either idle or in a scrapped state, signifying that the factory has been idle for some time. According to reports, the Beijing Hyundai Chongqing factory ceased operations in December 2021.

This marks the automaker’s second attempt to sell the Chongqing factory. The first listing took place on August 11 of this year, with a transfer base price of 3.68 billion yuan. However, the sale was not completed by the deadline, resulting in a second listing by BAIC Group on September 27, which saw a reduction of 1.1 billion yuan in the transfer price.

Beijing Hyundai dealership; photo credit: Beijing Hyundai

The Chongqing factory, constructed during the peak of Beijing Hyundai's expansion, involved an investment of 7.75 billion yuan. The factory began construction in 2015, commenced production in 2017, and was designed with an annual vehicle production capacity of 300,000 units and an engine production capacity of 300,000 units. The factory comprises 28 facilities covering stamping, body, painting, assembly, and engine production, featuring extensive use of industrial robots, achieving an automation rate of 100%, and producing a new vehicle every 55 seconds. Following the Chongqing factory's commencement of production, Beijing Hyundai's annual production capacity reached 1.65 million units.

However, between 2017 and 2021, Beijing Hyundai's approximate annual sales figures gradually declined from 820,000 units to 746,000 units, 703,000 units, 502,000 units, and 385,000 units. In 2022, Beijing Hyundai opted not to disclose its annual sales figures, though rough industry estimates suggest they did not surpass 300,000 units. Data disclosed by Beijing Hyundai for the first half of this year indicated overall sales of only 123,000 units.

Due to extensive idle capacity, Beijing Hyundai sold its Beijing No. 1 factory to Li Auto in 2021, marking its first factory sale in China. In June 2023, during discussions on its Chinese strategy, Jaehoon Chang, President and CEO of Hyundai Motor, indicated that Beijing Hyundai would close another Chinese factory and sell two of them. According to this plan, the Chongqing factory has already been divested, and among the remaining Beijing No. 2, No. 3, and Cangzhou factories, one will be closed, and one will be offered for sale. This will leave Beijing Hyundai with just one factory in China.