Hyundai Motor Co. is considering building a fourth car plant in China, its vice chairman said, as it seeks to increase production overseas to counter the effect of South Korea's strong currency as well as labor issues.
The comments from Hsueh Yung-hsing might indicate a change in the group's attitude toward expansion, but it is not clear whether group Chairman Chung Mong-koo will approve the move because of his disciplined approach to production capacity, said a person familiar with the matter.
"We expect our capacity in China to become constrained by 2015 and 2016 ... and are considering a plant with a capacity of 300,000 units," Hsueh Yung-hsing told reporters, adding that western China is a candidate for the new plant.
Hsueh, who is in charge of China operations for Hyundai and its affiliate, Kia Motors Corp., said a new plant is needed for the South Korean automakers to maintain their Chinese market share of 10 percent.
He also said the construction of a third Chinese assembly plant by Kia Motors would be completed in February 2014, which will generate total manufacturing capacity of 1.8 million vehicles in China for Hyundai and Kia.
Hyundai and Kia officials still assume the effective ban Chung placed on a new factory globally will remain intact at least for a while, a person close to the matter said.
Source: CAIN
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