Hyundai, BAIC to inject $1.1 bn in China joint venture  

Hyundai Motor Co. and its Chinese partner Beijing Motor Corp. (BAIC) will jointly invest $1.1 billion in their joint venture, which produces and sells Hyundai cars in China, to help the Korean car brand regain traction in the world’s largest car market through electrification.

BAIC said in a statement on Tuesday that the investment in Beijing Hyundai Motor Co., its 50-50 joint venture with Hyundai Motor in China, will be used to develop products tailored to Chinese consumer demands and boost exports from the JV to overseas markets.

The $1.1 billion investment, which will be split equally between the two partners, will bump up their JV’s total registered capital to $4.07 billion, according to Beijing government-controlled BAIC’s filing.

Their respective stakes will not change. 

The filing did not disclose the timing of the investment, but they are expected to inject new funds some time in the first half of next year, according to industry sources.

The investment comes nearly a year after the two partners announced a plan last January to team up to debut a new China-dedicated EV brand through the JV.

HYUNDAI’S STRONG COMMITMENT TO CHINA

The plan was part of Hyundai’s green car push in China, announced in June 2023, to introduce five new eco-friendly cars, including hybrid EVs, in phases starting in 2026.

Next year, Hyundai Motor also plans to debut its first China-dedicated EV model.

The Korean auto giant’s two research and development centers in China – in Shanghai and Yantai – are tasked with developing future mobility technologies including electrification.

Through the new investment, Hyundai Motor is expected to enhance its capability to develop future car technologies and ramp up its electrification in China, a key to recovering its lost market share in the world’s No. 1 car market, which is also the world’s top EV market.

Hyundai Motor’s auto sales in China plunged to 257,000 units in 2023 from a peak of more than 1 million units in 2016.

During that time, Chinese automakers focused on EV development under their government’s drive to foster the EV market as the country’s key industry.

China shipped 4.9 million cars overseas in 2023, of which 1.2 million units were eco-friendly cars such as EVs, hybrids and hydrogen cars. The latter figure was a 77.6% jump from the previous year.

Last year, China’s BYD Co. became the top global EV seller, beating out Tesla Inc.

AN EXPORT HUB

With the fresh funds, Hyundai Motor will also speed up its plan to transform Beijing Hyundai Motor into an export hub to offset dwindling domestic sales.

The Korean carmaker’s exports from its China operations are said to have exceeded 10,000 units for the first time in 2023. 

Its exports from China are expected to reach 50,000 units this year with more diverse car models, and it is said to have set a target of nearly double that figure for next year, according to sources.

Following the sale of two car factories in China, Beijing Hyundai Motor currently operates three plants with a combined production capacity of 1.05 million units annually.

Write to Jung-Eun Shin at newyearis@hankyung.com
Sookyung Seo edited this article.