Zurück zur Hauptseite » d, Hyundai's production capaci

by Yoo Seungki


SEOUL Mikhail Sergachev Lightning Jersey , March 12 (Xinhua) -- Hyundai Motor, South Korea's Number One automaker, is expected to speed up a strategy of "localization " by expanding its production capacity in China after China-South Korea free trade agreement (FTA) is implemented.


China and South Korea initialed the bilateral trade pact on Feb. 25, about three months after the two countries concluded negotiations on it. Beijing and Seoul began talks on the deal in May 2012.


Under the accord, China and South Korea will eliminate tariffs on more than 90 percent of all products from each other within 20 years after the FTA implementation. The South Korean government aims to sign the pact and get a parliamentary approval by the end of 2015.


In the auto sector, South Korea will abolish tariffs on gasoline buses and trucks from China within 15 years after the implementation. China will eliminate duties on buses and trucks from South Korea within 20 years. Passenger cars were excluded from the negotiation table.


"China excluded passenger cars from the negotiating table to protect its own industry. South Korean carmakers Andrei Vasilevskiy Lightning Jersey , centered on Hyundai Motor and Kia Motors, will deepen a localization strategy rather than increase exports," Kim Tae-Nyen, executive director of the Korea Automobile Manufacturers Association (KAMA) and secretary general of Seoul Motor Show, said in a recent interview with Xinhua.


Hyundai and its affiliate Kia have a combined production capacity of 1.9 million, which is expected to increase to 2.5 million in the medium term Victor Hedman Lightning Jersey , according to the KAMA data. China is the world's largest auto market, which held 24.2 million in total demand for cars in 2014. The demand is forecast to grow to 40 million in the long term, Kim said.


"China will account for about one third of global production and demand for cars. Now, it is meaningless to think about an auto industry without having China in mind. The China-South Korea FTA would contribute greatly to the development of car industries in both countries," said Kim.


With the FTA, South Korea would become the first car-producing country in the world Louis Domingue Lightning Jersey , which would sign the free trade pact with China. Leading auto-producing nations, including the United States, Germany and Japan, had yet to ink the FTA with China.


It will help enhance South Korean carmakers' access to the Chinese market. Unlike premium sedans from BMW and Mercedes Benz, South Korean models are relatively cheap in price and high in quality. Such combination may be emotionally attractive to Chinese consumers, Kim said.


Chinese automakers would increase sales of trucks and buses in South Korea as those products have much higher price competitiveness than South Korean models. Sales of a bus from China Shenlong Braydon Coburn Lightning Jersey , which began to be sold in South Korea from 2014, reached 400 last year. It is expected to more than double to 1,000 this year, Kim expected.


The Shenlong bus would be on display at this year's Seoul Motor Show scheduled to run from April 2 to April 12, the KAMA head said, noting that such exhibit would raise its brand recognition in the South Korean market.


Chinese automaker Beiqi Foton is allegedly negotiating with South Korea's foreign car importers and distributors to make inroads into the South Korean market Yanni Gourde Lightning Jersey , Kim said.


HYUNDAI EXPANSION IN CHINA


With the China-South Korea FTA excluding passenger cars from the dialogue table, Hyundai Motor has no choice but to strengthen expansion in China by producing, procuring and marketing more in the Chinese market, which the South Korea's Number One carmaker entered in 2002.


Hyundai currently has three factories in Beijing, which have a production capacity of 1.05 million vehicles a year. It has pushed to build its fourth factory in Chongqing, southwest China Ryan Callahan Lightning Jersey , by late 2016 and the fifth factory in Cangzhou in Hebei province by early 2017.


When those are completed, Hyundai's production capacity in China would increase to 1.65 million vehicles a year, the company said in a written interview.


"Hyundai's first three factories were built in Beijing to meet the Chinese government's earlier strategy to develop metropolitan areas. Auto parts procurement, logistics and subcontractors' presence were also considered," the company said.