Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. said Wednesday they are bracing for "cutthroat competition" in China this year as the world's No. 2 economy slows and foreign rivals expand their production capacity.

The Chinese market for passenger cars is expected to grow about 10 percent to 18.49 million units this year amid "cutthroat competition among rivals, hit by a range of negative economic factors, including a sluggish property market and debts of local governments," Hyundai Motor Group's Beijing unit said in a statement.

To reduce their notorious air pollution, China's big cities have also limited purchases of new cars, while major foreign rivals are building more plants in China, the statement said.

"Such factors are expected to make competition fiercer this year," it said.

Hyundai, Kia and their Chinese joint ventures sold a total of 1,843,354 vehicles in China last year, up 10.3 percent from the previous year, the statement said, without giving this year's sales target in the world's largest auto market.

China accounted for 23 percent of total vehicle sales by Hyundai and Kia last year, up from 22 percent the previous year, the statement said.

Last week, Hyundai and Kia predicted their combined auto sales would grow 2.5 percent to 8.2 million vehicles this year, marking the slowest sales growth in more than a decade.

Hyundai is planning to build two new plants in China. (Yonhap)