Hyundai Motor Co. and BAIC Motor will immediately invest US$825 million to strengthen competitiveness in electric car manufacturing.
A Hyundai official said they would raise 1.2 trillion won in capital, with each shouldering half of the planned investment into a 50-50 joint venture.
Half of the planned investment will be completed by the end of June, with the remainder injected in late December.
This aims to increase the financing capacity and also the competitiveness of electric vehicle manufacturers.
The decision comes as Hyundai Beijing, which was launched in 2002, is struggling to cope with swelling losses caused by declining sales in China.
Beijing Hyundai reported losses of around 1.2 trillion won and 950 billion won in 2020 and 2021, respectively. Hyundai’s car sales in China have fallen sharply after peaking in 2016 with sales of 1.14 million units. Last year, Hyundai sold 385,000 cars in China.
Hyundai Motor operates four factories in China, with a combined annual production capacity of 1.35 million units.
Amid falling sales in China, Hyundai Motor has suspended operations at its Chongqing plant since late last year as part of efforts to improve production efficiency.
Last month, Kia Corp., a subsidiary of Hyundai Motor, and Jiangsu Yueda Group also announced plans to inject about 1.1 trillion won into their struggling joint venture in China.
Hyundai Motor and Kia’s combined market share in passenger vehicles in China fell to 1.7 percent in 2021 after reaching 7.35 percent in 2016.