BAIC Motor [1958:HK] and Hyundai Motor [005380:KS] agreed to inject USD942m in their joint venture (JV) Beijing Hyundai, each contributing 50% of the fund, as reported by Korea Economic Daily on March 20. Beijing Hyundai’s registered capital will rise to RMB18.95bn (USD2.98bn) after the transaction. Both BAIC and Hyundai Motor will retain their 50% stake in the JV. According to BAIC, the acquisition intends to enhance Beijing Hyundai’s capital stability while preparing BAIC for the investment required to expand the company’s new energy vehicle (NEV) business.
In October 2002, BAIC and Hyundai Motor jointly established Beijing Hyundai, each providing 50% of the registered capital. By the end of 2018, Beijing Hyundai has sold over 10m automobiles in China. Hyundai’s sales in Beijing have been declining since it hit a high of 1.14m units in 2016, selling only 380,000 units in 2021. Beijing Hyundai’s cumulative sales volume in China was just 320,000 units till November 2021, down 33.95% YoY, and achieved only 58% of its annual sales target of 560,000 units. According to a source within the company, Hyundai plans to accelerate its transition to environmentally friendly vehicles, expand its NEV supply in markets such as the US, Europe, and China, with a goal of achieving full electrification by 2040. Hyundai revealed a strategy to revive sales in China in April 2021, with plans to introduce premium cars to the market.