South Korean legacy automaker Hyundai partnered with Beijing-based BAIC Motor to launch a new electric vehicle brand exclusive for the Chinese market, KED Global reports, citing industry sources.
The move is apparently part of Hyundai’s efforts to regain its market share in the world’s largest auto market after a continuous decline.
Plan details
According to the report, Hyundai and BAIC’s 50-50 electric vehicle manufacturing joint venture “Beijing Hyundai Motor Co.” plans to launch a new brand specifically designed for Chinese customers. The new brand currently has a codename “OE RE.”
It aligns with the joint venture’s announcement in June 2023 to develop up to five new EVs in the country in the next three years.
The models will reportedly feature cheaper Lithium iron phosphate (LFP) batteries to match the local customers’ preference for low-cost EVs.
Background
In hindsight, the Beijing Hyundai Motor Co. joint venture planned to manufacture BAIC’s Arcfox EVs at their Beijing factory. However, it did not materialize due to a huge disparity in financial terms.
For context, Arcfox is a luxury auto brand BAIC established in 2017. It was supposed to be the first effort of Hyundai to build vehicles beyond its Group to boost its Chinese factories’ capacity utilization, which is currently under 50%. Unfortunately, it did not go through.
Hyundai’s waning foothold in China
According to the report, Hyundai reached an annual car production rate of 1.6 million units in 2017. However, it declined to just about 250,000 units due to the Chinese government’s stringent restrictions against Korean brands. It was apparently a retaliation of Beijing on Seoul’s deployment of a US missile defense system called THAAD.
In effect, Hyundai failed to ride on China’s electric vehicle boom during these politically challenging times. All that said, launching a new China-focused electric vehicle brand is crucial for Hyundai to regain its share in the world’s largest auto market.
