BEIJING Beijing Hyundai Motor has put its Chongqing plant up for sale at a starting price of 3.68 billion yuan ($505 million), as the South Korean automaker rejigs its strategy in China amid fierce price competition and slowing demand.

Beijing Hyundai is selling the land use rights, equipment and other facilities belonging to its plant in the southwestern Chinese city of Chongqing, according to a disclosure on the China Beijing Equity Exchange that was published on Aug. 11.

The Chongqing plant, a joint venture with Beijing Automotive Group Co, started production in 2017 with an annual production capacity of 300,000 units.

"Hyundai Motor has been pursuing various measures to improve sales performance in China. We plan to strengthen our efforts to improve profitability through optimising operation of our production lineups," a Hyundai Motor spokesperson told Reuters on Tuesday.

"As of now, buyers and schedule have not been decided," said the spokesperson.

The sale came after Hyundai said in June that it would further restructure its China business to focus on profitability.

Hyundai had five plants in China at its peak and sold one of them in 2021. It plans to eventually operate just two where it will optimize production and use for exports to emerging markets.

Hyundai and its affiliate Kia have seen their vehicle sales in China plunge over the past few years amid a shift to electric vehicles in the world’s largest auto market.

Tesla was the only foreign brand to increase its market share in China in the first half, according to Chinese industry data.

China's passenger vehicle sales contracted for a second month in July, as the continuation of a price war and piecemeal government measures failed to incentive consumers.

($1 = 7.2942 Chinese yuan renminbi)

(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Additional reporting by Heekyoung Yang)