SEOUL -- To expand its growing presence in China, Hyundai Motor Co. plans a joint venture to make and sell up to 200,000 commercial vehicles a year.
Hyundai also said it has advanced its target year for selling 1 million vehicles annually in China to 2008, triple its expected sales this year. Previously, 1 million was the goal for 2010.
Hyundai signed a memorandum of understanding last week with Guangzhou Automobile Industry Group of Guangzhou to invest $430 million jointly to build a plant at Huadu, near Hong Kong.
The plant would have an initial capacity of 20,000 units a year, but plans call for expanding the capacity to 200,000 units a year by 2011.
With the expansion, the total investment is estimated at $1.24 billion.
"This commercial-vehicle joint venture is critical to reach our goal of producing 1 million vehicles in China by 2008 and making Hyundai the best-selling nameplate in China," said Hyundai Chairman Chung Mong Koo.
The plant will make buses and light-, medium- and heavy-duty trucks for China. The factory will include a commercial-vehicle engine plant, a proving grounds and an r&d center, Hyundai said.
Construction is scheduled to begin by year end on the first phase, scheduled for completion by 2007.
Hyundai and Guangzhou Automobile Industry Group each will hold a 50 percent interest in the joint venture, Guangzhou Hyundai Motor Co.
Huadu is a port on the Pearl River near Hong Kong. It is a commercial hub of Guangdong Province.
The largest opportunity for the plant will be in making light- and medium-duty trucks for China, a market 100 times larger than Korea for those vehicles, Hyundai said.
Zhang Fang You, chairman of Guangzhou Automobile Industry Group, said the two companies aim to make Guangzhou Hyundai Motor Co. the leading commercial vehicle maker in China.
Hyundai entered China in 2002, rapidly opening a plant with Beijing Automotive Industry Corp. to make Sonata and Elantra sedans. Meanwhile, its Kia Motors Corp. subsidiary began producing Accent and Optima sedans and Carnival minivans with Dongfeng Motor Industry Investment Co.
The two Korean joint ventures, which are expanding their plants, expect combined sales of 330,000 units this year, up from 206,500 units in 2004. From January through May 2005, their combined sales totaled more than 123,000 units.
You may e-mail Norman Thorpe at