Recent report says that Hyundai Motor has suspended production at a fourth China factory. This suspention will be for one week starting March 24. Online media ChosunBiz reported on Sunday that the fuelling worries about the impact of South Korea’s political tension with China on sales, in the automaker’s top market.
Shares of Hyundai Motor already fell as much as 3 percent on Monday, furthermore its affiliates Kia Motors and Hyundai Mobis also traded lower than the usual.
Online media ChosunBiz futher reported on Sunday that Hyundai Motor’s China joint venture has told suppliers that it will stop the factory in Cangzhou, Hebei Province from March 24 to April 1, to inspect its production line. A Hyundai Motor spokesperson in Seoul refused to give any immediate comments.
Industry officials and analysts shared that the reported suspension may aim to cut inventories stemming from slowing sales in China, which is a result of the political tension and rising competition from local brands.
South Korean firms adds that they are being targeted in China because of Beijing’s objections to a planned deployment of a US missile defense system in South Korea that China sees as a threat to its security.
Ko Tae-bong, an analyst at Hi Investment & Securities, concluded that the Hyundai Motor’s March sales in China may have fallen year-on-year due to the political spat, after gaining in January and February.