A group of Hyundai Motor Co dealerships in China is looking for 800 million-900 million yuan ($120 million – $135 million) in compensation from the South Korean automaker, stating Hyundai has cut the circulation of designs it exports to them, resulting in dealer losses and closures.
The group’s leader, Wang Rongzhen, informed Reuters on Wednesday that the automaker has actually downsized the variety of models it supplies to dealers in Hyundai imports in China, only regularly supplying one model, while progressively increasing automobile production in China.
“We sell automobiles, if you don’t offer us cars, naturally we will not have the ability to go on, we’ll close,” Wang said during an interview, approximating import dealerships are losing in between 3 million and 10 million yuan every year. The group looking for compensation represents 30 of the approximately 40 remaining imported Hyundai dealers in the nation.
The Hyundai row is brewing as vehicle dealerships in China, sure-fire moneymakers for decades, have had a troubled shift to slower growth worldwide’s biggest automobile market in the last two years. Lots of dealers are aiming to makers for support in absorbing losses: Germany’s BMW AG agreed to pay $820 million to cash-strapped dealers in early 2015.
As per the China Auto Dealers Chamber of Commerce, which is assisting to arrange the dealers, Hyundai’s import-only dealership network has already cut in half in size from 2014.
Hyundai stated in a declaration previously this week it is keeping interactions open in an effort to find a friendly option with the import-only dealers, noting that import dealerships account for less than 1 percent of its sales in China.
The automaker sold around 1.1 million passenger cars in China last year. It didn’t instantly discuss Wednesday on the quantity Wang stated his group was looking for in payment.
Wang stated that the group of dealers has been satisfying informally with Hyundai executives on and off since last month.
Presently, just the Velostar hatchback coupe is regularly available to Hyundai import dealerships in China, Wang stated, with the Genesis high-end sedan and a big version of the Sante Fe sport-utility car being provided irregularly.
