Hyundai, Guangzhou Motor ink JV deal
China's Guangzhou Motor Group and South Korean Hyundai Motor signed a preliminary agreement on June 21, 2005 in order to form a $1.24 billion worth commercial vehicle joint venture.
The joint venture will be located at Guangzhou, the capital city of
China's Guangdong province.
With the joint venture, Hyundai plans to increase its
production in
China to 1 million units by 2010.
Both companies will spend $430 million at the beginning of the joint venture. The joint venture is planned to begin
production in 2007 with 20'000 vehicles capacity and it will gradually increase its capacity to 200'000 vehicles per annum by 2011.
Guangzhou Motor will be Hyundai's sixth Chinese partner to produce vehicles. Guangzhou Motor has other joint ventures with Honda Motor and Toyota Motor. Hyundai forecasts Chinese demand for commercial vehicles such as trucks and buses to reach 3.5 million units in 2010.
Hyundai is building another $780-million worth joint venture in Anhui Province with Jianghuai Automobile Corp in order to make 90'000 trucks and 10'000 buses per annum by 2010.