Hyundai Motor Co.’s share price down, to expand China output with local partner BAIC Motor Corp.

The fifth-largest auto manufacturer worldwide, Hyundai Motor Co., plans to build two more factories in China in collaboration with its local partner BAIC Motor Corp. This step would expand the company’s output in the country by about 57% and is part of Hyundai’s efforts to meet customers’ demand in the largest market of the auto manufacturer.

Hyundai said in an official statement, cited by the Wall Street Journal: “The new factories will lay the groundwork for us to better compete with such rivals as Volkswagen and General Motors for the top spot in China.”

According to BAIC’s statement, the plants, which are intended to be built in Cangzhou, Hebei province and the south-western city of Chongqing, are expected to start production in the second half of 2016. BAIC did not give an investment amount, but noted that the annual output of the factories will amount to 300 000 vehicles each.

This step also comes as part of the company’s strategy to boost competitiveness to its largest rivals in China, the biggest automobile market globally. Hyundai has already established three factories in China.

The company’s affiliate, Kia Motors Corp., said that it plans to expand the capacity at one of its three plants situated in Jiangsu province from 300 000 up to 450 000 vehicles in two years.

The plans of the two auto manufacturers come only a few days after their rival Toyota Motor Corp. and its executives revealed that it may fail to reach its 2014 annual target, as the economic decline was faster than initially expected.

Shin Chung Kwan, an analyst at KB Investment & Securities Co., commented for Bloomberg: “Although the Chinese auto market’s growth has slowed recently, it still is a key market with high demand for vehicles, and Hyundai will be able to take advantage of that with the increased capacity.”

Hyundai Motor Co. lost 1.46% to close at KRW 169 000 per share today. The company is valued at KRW 46 519.80 billion.