Hyundai’s China woes continue as plant shut again

SEOULHyundai Motor Co halted production at a plant in China yesterday after a supplier stopped delivery of parts for air-intake systems, suspending operations for the second time in three weeks in its biggest market.

The China-based supplier, partly owned by a German company, has refused to deliver the parts since the weekend because of delayed payments from the carmaker’s local venture, a Hyundai spokesman in Seoul said by phone. Beijing Hyundai Motor Co is in talks with the vendor to resume supplies and there is a possibility that operations at the plant in Cangzhou, Hebei, can restart today, the spokesman said.

The shutdowns are the latest troubles for Hyundai in China, where its first-half sales plunged 42% amid a consumer backlash over political tensions and failure to introduce more popular car models. Beijing Hyundai, whose sales also suffered due to heavy discounting by rivals, appointed a new chief last week following the first round of shutdowns which struck all four of its operational factories in the country.

Beijing Hyundai, a venture between the South Korean carmaker and BAIC Motor Corp, has five plants in China. The newest one, in Chongqing, isn’t operational yet. The remaining three plants have sufficient supplies of air-intake parts and are operating normally, the Hyundai spokesman said.

Hyundai shares fell 0.7% to 139,000 won (RM528.20) as of 11:33am in Seoul yesterday. BAIC shares traded in Hong Kong declined 0.3%. — Bloomberg