Hyundai Motor on Monday stated it had suspended production at one of its Chinese factories for one week, fueling issue that a diplomatic standoff may be harming sales in the car manufacturer’s top market.
South Korean firms, from cosmetics to merchants, stated that they are being targeted in China because of Beijing’s objections to a planned deployment of the United States Terminal High Altitude Area Defence (THAAD) system in South Korea. China stresses the system’s effective radar can permeate its territory.
Reports of Hyundai’s China plant closure, initially reported by online media ChosunBiz on Sunday, led the shares of the company down at 3 percent on Monday. The shares recovered somewhat to end down 1.2 percent.
Hyundai stated it had suspended the plant located in Hebei Province, from March 24 to April 1, in order to inspect its production line to modify technology. The car manufacturer has 3 other passenger car factories in China – a nation that represents about a quarter of its overall sales. No additional details were available.
Market officials and experts state the suspension might be aimed at reducing stocks given slowing sales in China, because of political tension and increasing competition.
Ko Tae-bong, an analyst at Hi Investment & Securities, stated Hyundai’s March sales in China might have fallen year-on-year because of the political conflict, after gaining in previous two months.
