Beijing Hyundai Motor Co. Ltd., the joint venture between Hyundai Motor and Beijing Automotive Group, has reduced the minimum asking price for its auto plant located in the southwestern city of Chongqing, China as no buyer has emerged to date. According to sources on Monday, the lowest asking price for the plant is less than half of the initial price in August 2023.

As of October 27, the lowest asking price for the Chongqing plant was 1.62 billion yuan ($223 million), down from the original price of 3.68 billion yuan after the plant was up for sale in August, according to a filing by Beijing Hyundai to the China Beijing Equity Exchange (CBEX).

On August 11, the plant’s land use rights, equipment, and other facilities were offered for sale for 3.68 billion yuan, and the October 27 price is 56 percent lower than the original asking price. Apart from the Chongqing plant, 270 pieces of manufacturing equipment in Beijing Hyundai’s Chongqing engine plant are also listed for sale with a minimum asking price of 77.04 million yuan.

The sale of Hyundai’s Chongqing plant has been hampered by the rapid electrification of China’s auto industry. The Chinese government is actively promoting the green car industry to move away from being a laggard in the global automotive industry. The government plans to move towards producing only eco-friendly vehicles from 2035 and remove conventional internal combustion engines from the market. Under these circumstances, the production facilities at Hyundai Motor’s Chongqing plant, a factory for internal combustion engines, are bound to become obsolete.

China’s eco-friendly vehicles are swiftly gaining popularity, with one in three newly purchased cars in the country falling into this category. Out of the 17.82 million passenger vehicles sold between January and September 2023, over 5.9 million were classified as eco-friendly, encompassing electric vehicles and plug-in hybrids, making up a substantial 33.2 percent of the total sales. This surge marks a significant 7.3 percentage point increase in the share of green vehicles compared to a year earlier, when it stood at 25.9 percent.

By Moon Gwang-min and Minu Kim

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