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Construction of Fourth Hyundai China Plant in Cangzhou Starts

| Apr 08, 2015 07:07 AM EDT

Hyundai announced their plans to go head-to-head with Toyota's Prius.

The Hebei provincial government has announced on April 3, Friday, the start of construction for Hyundai Motor Co.’s fourth plant in Cangzhou in Hebei Province, which is aimed at increasing the local production for the said company.

According to a report by Automotive News China, the manufacturing plant, which cost 12 billion yuan ($7.4 billion), will start production late next year and will be expected to assemble up to 300,000 vehicles a year.

The report said that the Cangzhou plant's first two products will be a compact sedan and an SUV.

Hyundai Motor Co. has partnered with BAIC Motor Group Co. and will start building its fifth China plant in the southwest China municipality of Chongqing later this year.

The report said that the Chongqing plant, which will start operations in 2017, can produce up to 300,000 vehicles a year. Beijing Hyundai's three existing plants are located in Beijing, 200 kilometers north of Cangzhou.

The three facilities now can build more than one million vehicles annually.

Kia Motors, an affiliate of Hyundai, has also expressed plans to expand its building capacity at one of its three joint-venture assembly plants in Jiangsu Province, as it plans to increase production from the present 300,000 units to 450,000 vehicles next year.

According to the report, Dongfeng Yueda Kia Automobile Co. currently can build at least 800,000 vehicles annually. Dongfeng Yueda Kia is a partnership between Kia and two Chinese companies, Dongfeng Motor Corp. and Jiangsu Yueda Investment Co.

The combined production of Hyundai and Kia is expected to produce 2.7 million passenger and commercial vehicles by 2018. Last year, the two produced only 1.95 million vehicles, the report said.

Hyundai's China sales increased by 8 percent year on year to 1.13 million units last year, while Kia's deliveries increased 17 percent to 677,480 units, the report added.

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