(Yicai Global) March 21 -- Beijing Hyundai Motor, a joint venture between China’s BAIC Motor and South Korea’s Hyundai Motor, will receive a USD942 million capital injection from its owners to meet its operating capital and electrification investment needs after sales fell in recent years.

The JV partners will each invest USD471.1 million to raise the registered capital of Beijing Hyundai to nearly USD3 billion, Beijing-based BAIC said in a statement on March 18. After the transaction is completed, the shareholding ratio will remain at 50:50.

The move aims to enhance the security of Beijing Hyundai’s capital, fund further investments in vehicle electrification, improve operations, support the launch of new products, expand in the new energy vehicle field, and increase exports, BAIC added.

Beijing Hyundai had big losses in the past two years, BAIC noted. But its net loss shrank over 20 percent to CNY5 billion (USD786 million) last year. Yicai Global reported a month ago that its Chongqing plant had suspended operations because of overcapacity due to low sales.

Founded in 2002, Beijing Hyundai sold a record high 1.1 million vehicles in 2016. But sales declined in the following five years to 382,777 in 2021, down 23.5 percent from 2020, according to the China Passenger Car Association.

Shares of BAIC [HKG: 1958] closed unchanged at HKD2.48 (32 US cents) each today, after opening up 2.8 percent.

Editor: Futura Costaglione