Hyundai Motor and its Chinese partner BAIC Motor announced on Wednesday a $1.1 billion investment in their joint venture, Beijing Hyundai, signaling a renewed commitment to the world’s largest car market despite declining sales and growing competition from domestic automakers like BYD.
The investment, equally shared by Hyundai and BAIC, will raise the registered capital of the 22-year-old joint venture to $4.074 billion, according to a filing by BAIC. The move comes as Hyundai faces significant challenges in China, with its annual sales plummeting to 249,000 units in 2022—just one-fifth of its peak in 2016. Amid these struggles, Beijing Hyundai has shuttered two of its four Chinese production plants.
BAIC stated that the joint venture would focus on launching products tailored to Chinese consumer preferences and expanding exports to international markets. In the first nine months of 2023, Beijing Hyundai sold 136,460 vehicles, predominantly internal combustion engine models, with 34,179 units exported. However, Hyundai currently offers no pure electric or plug-in hybrid models in China, even as such vehicles now dominate over half of the Chinese car market.
This investment highlights Hyundai’s determination to adapt and remain competitive in China, where local manufacturers are increasingly commanding market share with their electric and hybrid vehicle offerings.
