Hyundai, Toyota to Expand Car Production Capacity in China

South Korea’s largest car manufacturer, Hyundai Motor Co, and Japanese car producer Toyota Motor Corp are expanding their car production capacity in China with new plants in the country.

Toyota was expected to announce building a new car plant in China, ending a three-year expansion freeze. The China expansion is part of the USD1.3 billion investment that Toyota will pour in Chin and Mexico.

The new car plant, which will be located in the city of Guangzhou, will increase Toyota’s annual production capacity in China by up to 100,000.

The new plant will produce up to 100,000 Yaris subcompacts a year. It will start car production by 2018, sources said.

Sources said Toyota will officially announce the expansion as early as this month.

Hyundai, meanwhile, officially broke ground for its fourth car manufacturing plant in China, located in Changzhou city, on Friday.

The new car plant is expected to produce 200,000 units annually with Hyundai planning to raise the annual production to 300,000 units.

The construction is expected to be completed by the end of 2016.

The construction of Hyundai’s fourth plant in China comes as the company registered plunging sales in the country.

From January to February of this year, Hyundai’s vehicles sales in China dropped 6.3% to 177,000 vehicles from the same period last year.

The South Korean car manufacturer also announced plans to construct its fifth plant in China in the city of Chongqing within the year.

The automotive industry in China has been the largest in the world measured by automobile unit production since 2008.

Since 2009 annual production of automobiles in China exceeds that of the European Union or that of the United States and Japan combined.

Most of the automobiles produced in China are made by joint ventures between local and foreign manufacturers such as Volkswagen, General Motors, Hyundai, Nissan, Honda, Toyota and Mitsubishi.

Indigenous brands that do not cooperate with a multinational also exist but may be less popular. These include: Beijing Automotive Group, Brilliance Automotive, BYD, Dongfeng Motor, FAW Group, SAIC Motor, Chang’an (Chana), Geely, Chery, Jianghuai (JAC), Great Wall, and Guangzhou Automobile Group.

While most of the cars manufactured in China are sold within China, exports reached 814,300 units in 2011.

China’s home market provides its automakers a solid base and Chinese economic planners hope to build globally competitive auto companies. –