First model expected to be a China-specific ix35 C-segment sport utility vehicle (Tucson globally)

South Korean automaker Hyundai is planning to break ground on its Chongqing plant in China by the middle of next week, reports Yonhap News Agency. Company chairperson Chung Mong-koo is planning to attend the ceremony, which is scheduled for 23 June.

Significance: Hyundai first revealed its intention to build a new car plant in Chongqing during March 2014. The plant reportedly involves an investment of KRW1 trillion (USD890 million), which will be capable of producing 300,000 units per annum (upa). The plant is scheduled to begin operations some time in 2017, according to the report. The construction of the Chongqing plant was originally slated to begin in mid-2014, although the Chinese National Development and Reform Commission (NDRC) reportedly did not approve the investment due to regulatory requirements, following which Hyundai announced plans to build another plant in Hebei province, which will also have a production capacity of 300,000 upa. Hyundai has three existing plants in Beijing, and venturing to the southwest region of Chongqing gives the brand greater penetration capacity in the western regions of China. Production of the first model at the Chongqing plant is expected to be a China-specific ix35 C-segment sport utility vehicle (SUV), known as the Tucson globally, which is currently being produced at Hyundai’s Beijing Shunyi II plant, according to IHS Automotive data. Hyundai believes that the new plants will help lift sales numbers in the country, having posted another disappointing performance in May with volumes down 12% year on year to 80,000 units.

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