Hyundai Motor Co said on Sunday it had signed an initial agreement to create a commercial vehicle joint venture with China's Baotou Bei Ben Heavy-Duty Truck Co Ltd with a total investment of $400 million.
The 50-50 venture with the Chinese truck maker will be launched next year, taking over Baotou Bei Ben's existing large truck business that has an annual capacity of 40,000 units, the South Korean carmaker said in a statement.
Hyundai will initially focus on heavy duty trucks with a sales target of 100,000 units in China by 2014 and gradually increase investment to expand its business to include the full line-up of commercial vehicles.
"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 in the statement.
"Our business in China will play a pivotal role in helping us achieve our global sales target of 200,000 units in commercial vehicles by 2013."
Choi told Yonhap news agency that Hyundai would differentiate with low-price, quality products in the Chinese market from competitors such as German truckmaker MAN and Volkswagen's Swedish unit Scania. Hyundai was planning to enter US commercial vehicle market within two to three years via a joint venture, before its foray into Europe, he was quoted as saying.