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| June 21, 2005 |
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Hyundai Motor Co. and Guangzhou Motor Group Sign MOU to Produce Trucks and Buses in China |
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50:50 j-v covers manufacturing of commercial vehicles
Total investment of $430 Mln in new Guangdong plant
20,000 capacity (2007) plant to grow to 200,000 by 2011
To produce unique models for Chinese market
(Seoul,Korea) - Hyundai Motor Co. today signed an memorandum of understanding with China's Guangzhou Motor Group to establish a 50-50 joint venture company for the manufacturing, sales and service of commercial vehicles.
With a total investment of $430 million, the two partners will establish Guangzhou Hyundai Motor Co. and build a new plant to be located in Huadu, Guangdong province for the manufacturing of a light, medium and heavy duty trucks and buses. Huadu, a port city located close to Hong Kong on the Pearl River Delta, is the commercial hub of Guangdong province.
The new plant located on a 2 million square meter site will have a floor space of 165,000 square meters and will include a commercial vehicle engine plant, a proving ground as well as a research and development center.
Construction work on the new plant will begin by the end of this year and is due for completion by 2007. The initial production capacity will be 20,000 units per year and it will be expanded to 200,000 by 2011 with a total investment of $1.24 billion.
"This commercial vehicle joint venture is critical to reach our goal of producing one million cars in China by 2008 and making Hyundai the best-selling nameplate in China," said Hyundai Chairman and CEO Chung Mong-Koo. China's bus market is seven times larger than Korea's but the biggest area of opportunity for Hyundai is in the China's light and medium-duty truck market which is 100 times larger than Korea's.
Zhang Fang You, Chairman of Guangzhou Motor Group said, "We are impressed by Hyundai Motor Co.'s great success with Beijing Hyundai Motor Co. and we will extend full support to Hyundai to ensure Guangzhou Hyundai Motor Co. becomes the leading commercial vehicle manufacturer in China."
Guangzhou Motor Group is the fifth largest automotive concern in China and Guangzhou Hyundai Motor Co. provides Hyundai with a two-pronged strategy for expanding its product portfolio in China. The company in 2002 established Beijing Hyundai Motor Co., a 50-50 joint venture with Beijing Automotive Industry Holdings Co.
Established in 1967, Hyundai Motor Co. has grown into the Hyundai Kia Automotive Group which includes over two dozen auto-related subsidiaries and affiliates. Employing over 50,000 people worldwide, Hyundai Motor posted US$26.1 billion in sales in 2004 (on a non-consolidated basis). Hyundai motor vehicles are sold in 193 countries through some 5000 dealerships and showrooms. Hyundai Motor Co. is a sponsor of the 2006 FIFA Germany World Cup. Further information about Hyundai Motor Co. and its products is available at http://www.hyundai-motor.com
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