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    China Business
     Jan 13, 2006
Hyundai to build second China engine plant

SEOUL - Hyundai Motor Co, South Korea's largest automaker, has agreed with the Chinese government to build its second engine plant in the mainland, the company's top executive said January 11.

"We agreed with the Chinese government to build a wholly-owned engine plant in the Chinese province of Shandong," Hyundai Motor vice chairman Kim Dong-jin said at a breakfast meeting organized by the Korea International Trade Association (KITA). Hyundai



Motor had previously said it was considering setting up the new plant to make 2,000-cubic-centimeter engines in the eastern province.

Kim said Hyundai Motor will increase the annual engine production capacity at its first plant in Beijing to 500,000 units from the current 300,000 units. The decision to raise the production capacity at the Beijing plant was in return for resolving a feud with the Chinese government, Kim said.

The Chinese government had requested Hyundai Motor to jointly build the second engine plant with Beijing Automotive Industry Holding Co, the Korean automaker's Chinese partner, Kim said. The request was aimed at having Hyundai Motor transfer its engine technology to Beijing Automotive, according to Kim. "It was difficult to persuade the Chinese government, but I think we don't need to worry about the matter of technology transfer anymore," Kim said.

Hyundai is now producing 1,500-cubic-centimeter and 1,800-cubic-centimeter engines at the Beijing plant, a Hyundai Motor spokesman said by telephone, asking not to be named. The spokesman declined to comment about the schedule for the second engine plant's construction.

Hyundai Motor had planned to build the second engine plant in Beijing, but the company changed the site because of concerns over possible technology leakages, the JoongAng Ilbo reported on January 4, citing an unnamed Hyundai Motor official. In 2002, Hyundai Motor and Beijing Automotive set up a 50:50 joint venture in China.

(Asia Pulse/Yonhap)

 

 
 



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