SHANGHAI -- Hyundai Motor's China venture has raised its 2005 unit sales target by 15 percent after doubling capacity at its plant, in the latest sign that global automakers expect a second-half acceleration in the world's third-biggest vehicle market.
Beijing Hyundai Automotive Corp., a 50-50 joint venture between South Korea's biggest automaker and Beijing Automotive, aimed to sell 230,000 vehicles this year, up from an earlier target of 200,000, an executive with the venture told Reuters.
"Sales are picking up and we are optimistic about our second-half performance," he said.
The revision came after the venture completed its plant expansion in May, when it shut down production for the month to double capacity to 300,000 units.
The venture sold 109,564 vehicles from January to June, almost double the 56,180 units it moved in the same period of 2004, he added.
The expansion is part of an ambitious growth plan that will see Hyundai pumping an additional $740 million into its mainland venture by 2007 to build a second plant in a bid to produce 600,000 units per year in China.
The South Korean auto maker said in April it aimed to reap sales of $7 billion in China this year, but did not say what kind of growth that would represent over last year.
China, once an easy profit center providing global carmakers with double-digit margins, has become one of the industry's most intense battlegrounds.
Foreign automakers such as General Motors, Ford Motor Co. and Volkswagen are investing $15 billion to triple capacity to over 7 million cars by 2008 -- sparking fears of an impending glut.
Analysts say car sales are expected to grow just 10 to 15 percent this year, matching growth in 2004 but well off a doubling in 2003.
But signs that sales in China could be on the rebound have surfaced. France's PSA Peugeot Citroen lifted its 2005 China unit sales target by 17 percent in June.
Nissan Motor Co.'s Chinese venture more than doubled car sales in the first half of 2005 to become the nation's fastest-growing auto producer, and is now banking on new models to help it meet this year's target.