Hyundai will probably build EVs for BAIC
The Korea Economic Daily reports that Hyundai initially planned to introduce electric models of its Ioniq brand in China. However, the Korean manufacturer rejected this plan because it was considered “reckless” to compete with its own brand against dominant Chinese EV manufacturers such as BYD. Incidentally, according to the report, Hyundai approached BAIC, not the other way around.
Instead, Hyundai is now said to be producing electric cars for Arcfox, a premium brand founded in 2017 by the Chinese car company BAIC – it would be the first time that Hyundai builds cars for a brand that does not belong to its own group. That would allow Hyundai to increase the capacity utilisation of its plants in China, which is currently below 50 per cent.
Hyundai’s traditional internal combustion business in China has been sluggish for some time – its market share in the world’s largest car market has fallen below the one per cent mark in 2022. “The cooperation suggests Hyundai has yet to give up the Chinese market,” one of the sources told the Korea Economic Daily. “Hyundai is trying to rebuild a bridgehead for expansion in the country by establishing an EV production line.”
EV production in China is intended to be “a step to ease the financial difficulties,” a second source indicated. Beijing Hyundai posted an operating loss of 800 billion won, the equivalent of about $600 million, in 2022, partly due to poor plant utilisation.
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