[THE INVESTOR] Hyundai Motor, South Korea’s largest automaker, has temporarily halted production at its fourth auto plant in China, according to media reports on March 27.
Beijing Hyundai, a 50:50 joint venture between Hyundai Motor and Beijing Automotive Group, told its suppliers it would stop the operation of assembly lines at Cangzhou plant in Hebei province from March 24 through April 1.
The suspension, according to Hyundai, is part of a regular maintenance checkup. But industry watchers say an inventory glut is prompting the automaker to idle production, amid China’s escalating economic retaliation against South Korea’s decision to deploy the US anti-missile system THAAD in the region.
“Inventory (at the Cangzhou plant) has piled up on slow sales due to THAAD,” Kim Jin-woo, researcher at Korea Investment & Securities said. “If weak sales in China continue, there will be a negative impact on both the automaker as well as its auto parts suppliers.”
The Cangzhou facility which started operation in October 2016 assembles 200,000 units annually, with plans to expand to 300,000 units by 2018. The plant produces Hyundai’s China-only model Verna Yuena sedan.
