Hyundai to use idle capacity in China for exports to SE Asia

According to a media report, Hyundai is planning to use the excess capacity of its plants in China to cater to markets in Southeast Asia. The move comes after a diplomatic dispute between China and South Korea caused the former to shun the latter's goods, including automobiles.

In 2012, the company had a market share of 10.5 percent which reduced to 8.1 percent before the dispute. While the diplomatic crisis was resolved, Hyundai’s market share today stands at just 4.4 percent. The Korean company aims to sell 9,00,000 cars in the current year, compared to last year's tally of 7,85,000 units. The total installed capacity across the five plants in China is almost double at 16.5 lakh units.

It was also reported that exporting from China to countries like Vietnam could attract lesser duty, compared to South Korea (50% instead of 78%). Growth of Hyundai and Kia across Southeast Asia has been 26 percent YoY, while total vehicle sales grew by 4 percent to a total of 34.1 lakh units.

Source: Reuters