Hyundai Motor Downsizing China Operations

Hyundai Motor has begun downsizing its presence in China as it decided to close one of its plants in Beijing to cope with falling sales there.

Industry analysts said the company's recent plan to stop operating a Beijing-based plant is the "trigger" to a wide range of restructuring across Hyundai Motor's China businesses, given that the company has been backpedaling for years in the world's largest market amid Chinese brand growth and the aftermath of diplomatic friction between Korea and China in 2017.

Hyundai Motor said Thursday it plans to stop the assembly lines in its Beijing Hyundai Motor Company (BHMC) Plant 1 to improve BHMC's efficiency. BHMC is a joint venture between China's BAIC Motor and Hyundai Motor.

"To enhance competitiveness of plants in China and secure profitability, the company is doing a comprehensive review on its mid and long-term plant operation plan," a Hyundai Motor official said.

As part of that, we are planning to stop the operation of plant 1 in Beijing and are working on plans that will enable more efficient operation in China.

Though the company did not confirm exact details, parts suppliers said the plant, currently manufacturing the Avante and the ix25, will stop operating next month.

Along with the halt, BHMC is making payroll cuts. The company cut approximately 1,900 jobs at its plants 1, 2 and 3 and relocated around 100 employees to plants 4 and 5. Following the reorganization, the number of BHMC's total employee declined to 13,000. BHMC has six plants in China. Plants 1, 2 and 3 are in Beijing, 4 is in Cangzhou, and 5 is in Chongqing. One commercial vehicle plant is in Sichuan...