Hyundai Motor signs deal for joint commercial car venture in China

SEOUL, April 28 (Yonhap) -- South Korea's leading automaker Hyundai Motor Co. said Thursday that it has finalized an agreement with China's Sichuan Nanjun Automobile Co. to set up a joint production base for commercial vehicles in China's southwestern province of Sichuan. The agreement comes about six months after the companies signed a memorandum of understanding on establishing a joint production base there. Under the agreement, Hyundai and Nanjun will each invest about 300 billion won (US$279 million) to set up the tentatively named Sichuan Hyundai Automobile Co. with an annual production capacity of 160,000 units in 2013, according to Hyundai Motor. China, the world's largest market for passenger vehicles, is also the world's largest market for commercial cars with 4.3 million commercial vehicles sold in 2010. Hyundai Motor seeks to sell about 73,000 commercial vehicles in China this year and increase its sales to 160,000 units by 2015, when China's commercial vehicle market is expected to grow to 5.2 million units, the company said. "Cooperation between Nanjun Automobile, which has a strong base in China's commercial vehicle market, and Hyundai Motor with advanced commercial vehicle technologies is expected to create large synergy," it said in a press release. Established in 1998, Nanjun Automobile is the largest commercial vehicle maker in Sichuan and the 11th-largest conglomerate in China with two production facilities in Sichuan's Jiyang and Chengdu that annually produce 120,000 commercial vehicles. Hyundai Motor Co. and its affiliate Kia Motors Corp. make up the world's fifth-largest automaker, Hyundai Motor Group.