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Hyundai to invest in China venture
SEOUL, South Korea (CNN) -- Hyundai Motor Co., the largest Korean carmaker, said Monday it has won approval for a joint venture with Beijing Automotive Industry Holding in China. Hyundai said the Chinese government had green lighted the deal to form Beijing Hyundai Motor, a 50-50 joint venture. Hyundai will invest $100 million initially, and plans to boost that to $430 million by 2005 and $1.1 billion by 2010. Beijing Hyundai will start making Hyundai's EF Sonata mid-sized sedan and expand into making the Elantra XD. It is due to produce 2,000 cars this year, with total production rising to 30,000 by 2003 and 500,000 by 2010. According to one report, Hyundai expects the Beijing city government to select its Sonata model as the standard taxi in the city. Market likely to top 1 millionThe joint venture comes just after Shanghai Automotive Industry Corp. agreed to pay $60 million for a 10 percent stake in a joint venture between Daewoo Motor Co. and General Motors in South Korea. (Full story) GM Daewoo Auto and Technology Co. expects to start operation later this month, with plans to export to China. The Chinese car market is expanding rapidly, with sales expected to grow some 40 percent this year. That would boost total sales past 1 million cars for the first time. The 2008 Olympic games, due to be held in the Chinese capital, are expected to boost demand for cars. Beijing Automotive already has a joint venture deal with DaimlerChrysler to produce its Cherokee sports utility vehicle. Hyundai stock is up 5.7 percent at 27,150 won early on Monday afternoon, outdoing a 4.06 percent rise in the Kospi.
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