Hyundai Motor Co. and BAIC Motor Co. agreed to jointly inject $942 million to shore up their unprofitable joint venture that remains plagued by weak sales.
The two partners will each contribute half of the amount in the joint venture, called Beijing Hyundai, before the end of 2022, BAIC, a Hong Kong-listed company, said.
“The main purpose of the transaction is to strengthen the capital stability of Beijing Hyundai and to effectively respond to the need for further investment in the face of the electrification of China’s automotive industry,” BAIC said in a statement.
Beijing Hyundai was established as a 50-50 partnership between BAIC and Hyundai in 2002 in Beijing. It produces and markets cars and light trucks for the Hyundai brand.
The joint venture posted a loss of 6.3 billion yuan ($991 million) in 2021 after losing nearly 5 billion yuan in 2020, according to BAIC.
Beijing Hyundai assembles vehicles in three Chinese cities — Beijing, Cangzhou and Chongqing. The three plants combined can produce up to 1.05 million vehicles a year, according to its website.
BAIC hasn’t disclosed sales at Beijing Hyundai. But the China Passenger Car Association said sales at the joint venture plunged 19 percent to some 360,000 in 2021.