Under the agreement, Hyundai and Baotou Bei Ben Heavy-Duty Truck Co. will invest a total of US$400 million to establish a 50-50 joint venture which will takeover Baotou Bei Ben’s existing large truck business that has a capacity of 40,000 units a year. The joint venture will initially launch a refreshed Baotou Bei Ben model and then launch a brand new model by 2012 with input from Hyundai’s technology and equipment.

Hyundai will initially focus on heavy-duty trucks with a sales target of 100,000 units in China by the year 2014. The company will gradually increase investment to expand its business to include the full line-up of commercial vehicles.

The joint business will cover all aspects of the commercial vehicle business, ranging from vehicle and engine manufacturing, sales, R&D, after sales service, to distribution. Together with Hyundai’s passenger car business in China, the new JV will enable Hyundai to offer a more complete range of products in China and respond more efficiently to market needs. The joint venture will also enable Hyundai to bypass the construction of a factory, which usually takes about two years.

Baotou Bei Ben Heavy-Duty Truck Co. is one of the leading commercial vehicle companies in China, ranking No. 6 among heavy-duty vehicle makers in the country by sales. It operates three manufacturing plants that are evenly distributed across the country. The parent company is China North Industries Group.