CHENGDU, Sichuan – Hyundai Motor Co. signed a contract on October 21 with Ziyang Nanjun Automotive Group (Nanjun), the largest commercial vehicle producer in Sichuan, China, to jointly invest ¥3 billion ($442 million) for a commercial vehicle joint venture project in the province.
The 50:50 joint venture will pursue every aspect of the commercial vehicle business, including production, sales, R&D, and service for trucks, buses and engines. The project will also manufacture new energy vehicles such as electric vehicles, energy-saving vehicles and compressed natural gas (CNG) vehicles.
The joint venture will effectively capture commercial vehicle demand in China’s western region, demand which is increasing rapidly as result of the government’s western region development project.
Output and sales of the Hyundai brand commercial vehicles by the new JV are planned at 200,000 units by 2013, 400,000 units by 2017, and 700,000 units by 2020, according a local media report.
China’s commercial vehicle market is expected to grow rapidly with a demand of 5.5 million units in 2015, from 4.5 million units this year. “Hyundai Motor’s entry into the Chinese commercial vehicle market is a necessity in order for it to expand its overall China presence,” said Choi Han-young, vice chairman of the company’s commercial vehicle division.
Established in 1998, Nanjun Automobile is the 11th largest commercial vehicle manufacturer in China. It operates two plants in Sichuan with combined annual capacity of 120,000 units of a full line of commercial vehicles.
Hyundai Motor, the world’s fifth-largest automaker, sold over 510,000 vehicles in the first nine months of this year in China, up 23.8 percent from the same period last year.