Hyundai produces electric cars for the Chinese company

Production for Arcfox - BAIC's sub-brand - will help the Korean automaker improve its business situation in China.

Hyundai and BAIC signed an agreement to produce Arcfox electric vehicles at a factory in Beijing - a joint venture with 50/50 capital between the two companies. Arcfox also marks the first time Hyundai has produced vehicles for a foreign brand.

"The cooperation shows that Hyundai does not want to give up the Chinese market. Hyundai is trying to rebuild its territory to expand the market in the East Asian country by establishing an electric vehicle production line," a source said. news said.

Arcfox αS electric sedan launched in China in early 2021. Photo: Sohu

Hyundai's market share in China decreased to nearly 1% in 2022, from a peak of 7%, when the company only sold 254,000 vehicles here compared to total market sales of 26.9 million vehicles. Hyundai branch in Beijing suffered a loss of 597.7 million USD in 2022.

Many customers also avoid buying Hyundai cars when the company only sells electrified versions of current internal combustion engine models, instead of new electric car models with their own platforms.

The Korean car company once planned to launch Ioniq models in China - a new electric car with its own platform - but canceled it when someone thought they were being reckless when fighting against the dominant Chinese electric car companies. market value, like BYD.

Therefore, Hyundai established a joint venture with BAIC and discussed the production of Arcfox electric vehicles.

"The production is a step to ease financial difficulties," another source in Beijing said, adding that Hyundai's plans are to set up its own electric vehicle production line in China.

Arcfox was founded in 2017 and belongs to the "giant" BAIC, positioned as a high-end electric vehicle brand. The Arcfox Alpha S-HI model is equipped with Huawei's self-driving system. BAIC is also trying to promote market share expansion in the electric vehicle segment at home by reducing the price of Arcfox models by 13.8% this year.

Hyundai will apparently be responsible for vehicle design, production and quality control for Arcfox electric vehicles at its third factory in Beijing. Producing electric vehicles for Arcfox is expected to help increase the operating productivity of Hyundai factories in China, currently less than 50%.

Having 5 factories in China with an output of 1.6 million vehicles per year, Hyundai is looking to sell the factory in Chongqing. The company also sold one of its Beijing factories to electric vehicle company Li Auto. Meaning, Hyundai currently only has 4 factories, and may only have 3 left.

"We will upgrade operational efficiency at existing factories and increase exports to emerging markets," Hyundai CEO Chang Jae-hoon said at a company event in June.

Hyundai has also begun to show signs of recovery in China. The company produced and sold 157,000 vehicles in the first eight months of this year, an increase of 9% over the same period in 2022, as it focused on selling more profitable SUV models.

Financial and Cryptocurrency News Forum by Company Remitano Network

Copyright © 2017 - ALO. All rights reserved