HONG KONG - Hyundai-Kia Automotive Group, the world's No. 5 automaker, aims to grow at twice the market rate next year in China, as consumers in the world's largest auto market snap up its affordable, quality cars.
The company, whose two main China units are Bejing Hyundai Motor and Kia Motors Corp, expects its China sales to grow by 25 percent next year to around 1 million units, up from an estimated 800,000 this year, Noh Jae-man, president of Beijing Hyundai, said on Thursday.
Most analysts expect China's broader auto market, on track for record sales this year under government incentive programs, to grow between 10-15 percent in 2010.
The South Korean firm has accelerated to become the maker of the top selling foreign car brand in China in just seven years, finding a niche between domestic brands known for cheap prices and foreign brands such as Volkswagen and Toyota, known for their quality but also for being expensive.
Beijing Hyundai Motor, a joint venture between Hyundai Motor and Beijing Automotive Industry Holding Corp (BAIC), is aiming to sell 670,000 cars next year, up 17.5 percent from a projected 570,000 in 2009, Noh told a media briefing.
Kia, meanwhile, aims to sell 330,000 cars in China next year, 43 percent more than an estimated 230,000 in 2009, he said.
South Korea's top carmaker, which competes with Toyota Motor, Honda Motor and others globally, is among beneficiaries of China's economic stimulus measures that include aggressive cuts in sales tax for small cars and subsidies for buyers in rural areas.
I hope the stimulus policy will continue next year and the market also expects this to be extended, Noh said.
To meet its aggressive growth targets, Beijing Hyundai is planning its third car manufacturing plant in China, which will lift the company's capacity by 50 percent to 900,000 vehicles.
Hyundai's investment in China totaled $1.5 billion to date and the new plant to be built in Beijing will cost roughly $800 million, he added.
The company is reviewing its production capacity in India but would not confirm whether it will build a third plant there soon.
It's clear we are approaching the limit of our manufacturing capacity. The India market is growing and overseas demand for the Indian product is growing so I think that's now undergoing serious review but we don't have any plan to make public at this time, a Hyundai executive said. (Editing by Jacqueline Wong and Jonathan Hopfner)