Hyundai Motor Co. today said it has agreed to launch a $400 million truck manufacturing venture in China with a local partner as it seeks further inroads in the world's biggest auto market.
Hyundai Motor, South Korea's largest automaker, said it signed an initial agreement with Chinese commercial vehicle manufacturer Baotou Bei Ben Heavy-Duty Truck Co. and has set a sales target of 100,000 heavy duty trucks in China by 2014.
Under the deal, signed Saturday in Seoul, the two companies will invest a total of $400 million to set up the 50:50 joint venture next year, Hyundai said. It will take over the Chinese company's existing large truck business that can manufacture 40,000 vehicles a year.
Hyundai, which already makes passenger cars in China, said it will initially focus on heavy duty trucks in the new venture and gradually boost its investment to include what it described as a "full lineup of commercial vehicles".
"The joint venture will initially launch a refreshed Baotou Bei Ben model and then launch a brand new model by 2012 with input from Hyundai's modern technology and equipment, gaining competitiveness in the Chinese commercial vehicle market," Hyundai said in a release.
"Entering China's commercial vehicle market is essential in establishing Hyundai's reputation as the most comprehensive car manufacturer in the world's largest auto market," Choi Han-young, Vice-Chairman in charge of Hyundai's commercial vehicle division, said at the signing of the deal, according to the release.