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Hyundai Motor suspends another China plants amid political tension
[SEOUL] Hyundai Motor has suspended production at a fourth China factory for one week starting March 24, online media ChosunBiz reported on Sunday, 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 fell as much as three per cent on Monday, while its affiliates Kia Motors and Hyundai Mobis also traded lower.
Online media ChosunBiz reported on Sunday that Hyundai Motor's China joint venture has told suppliers that it will idle the factory in Cangzhou, Hebei Province from March 24 to April 1, to check its production line. A Hyundai Motor spokesperson in Seoul did not have immediate comments.
Industry officials and analysts said the reported suspension may aim to cut inventories stemming from slowing sales in China as a result of a political tension and rising competition from local players.
South Korean firms say that they are being targeted in China because of Beijing's objections to a planned deployment of a US missile defence system in South Korea, which China sees as a threat to its security.
Ko Tae Bong, an analyst at Hi Investment & Securities, said Hyundai Motor's March sales in China may have fallen year-on-year due to the political spat, after gaining in January and February.