SEOUL/SHANGHAI (Reuters) -- Hyundai Motor Co. plans to build two factories in China instead of one, two people familiar with the matter told Reuters today.
The increase is to meet the request of China's central government, which wants Hyundai to build a plant in the northeastern Hebei province as part of a development plan spanning Beijing, Tianjin and Hebei, one of the people said.
Hyundai, which has three factories in Beijing, in March signed a preliminary agreement to build a plant in the southwestern city of Chongqing to help the automaker expand into western China.
One of the people said Hyundai had planned to open its $1 billion Chongqing factory in early 2016, but would likely start production later because the automaker has yet to gain central government permission.
Hyundai, which has a joint venture in China with Beijing Automotive Industry Holding Co. Ltd., now aims to open a factory in the Hebei city of Huanghua in 2016, ahead of its proposed plant in Chongqing, the two people said.
"This is like hitting two birds with one stone," in that building two plants would please both the central and Chongqing governments, one of the people said.
The two people spoke on condition of anonymity because the plans are confidential.
Hyundai's decision comes as foreign direct investment in China fell in August to a low not seen in at least two and a half years, adding to a string of weak economic indicators in the world's second-biggest economy.
In the same month, Hyundai's sales in China slipped 1 percent to 84,516 vehicles, from 85,091 vehicles a year earlier.
The change in plan is also reminiscent of a decision by Fiat Chrysler's Chinese partner Guangzhou Automobile Group Co. to build two plants, after competition between the cities of Guangzhou and Changsha to host the auto partnership.
A Hyundai spokeswoman said in an emailed statement that nothing has been decided regarding new factories in China.