South Korean carmakers cut China production amid missile conflict

South Korea’s Hyundai Motor and Kia Motors have greatly cut vehicle production in China, sources stated, as anti-Korean belief and rivals from Chinese brands play havoc on sales and threaten revenues.

Hyundai and Kia saw their combined China sales downturn by 52 percent in March from a year previously, another individual stated, threatening not only the automakers’ revenues but those of its South Korean providers. China, the world’s most significant car market, represented over a quarter of the pair’s 2016 abroad sales.

A Chinese reaction over the implementation of a U.S. missile defense system outside Seoul has targeted South Korean companies consisting of Lotte Group with boycott calls in state media, protests and suspensions of operations.

The move outraged Beijing, although Seoul states the system is a reaction to North Korea’s nuclear threat and is not focused on China.

While the diplomatic row is a problem, the bigger issue for the South Korean automakers is stiff competition in China and the United States, where their pillar sedans have lost market share to sport utility vehicles, experts and sources said.