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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

Hyundai resumes Chinese production after supply halt

  • PUBLISHED :August 30, 2017 - 16:26
  • UPDATED :August 30, 2017 - 16:26
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[THE INVESTOR]  Hyundai Motor, Korea’s largest carmaker, on Aug. 30 said it has resumed production at its China plants, following a weeklong operation disruption due to a dispute with its parts supplier. 

The carmaker said its four factories in China -- three in Beijing and one in Changzhou -- gradually began production early in the afternoon as the local supplier restarted supplying key components to Beijing Hyundai, Hyundai’s Chinese joint venture. 

Hyundai had to halt production last week when a local parts maker refused to deliver plastic fuel tanks after payments were delayed by up to four months. The outstanding bill is estimated to be around 111 million yuan (USD$16.86 million), according to media reports. Hyundai declined to confirm the exact value. 




The carmaker said its Chinese office is in talks with the supplier to resolve the payment issue as soon as possible. 

The failed payments were due to a protracted sales slump following diplomatic row between Beijing and Seoul. Heightened Chinese consumer backlash over Korea’s decision to deploy the US-led THAAD missile system caused the decline, with the fallout to persist in the second half of this year as well. 

China sales of Hyundai in the second quarter slumped 64 percent to 105,000 units, showing no immediate signs of recovery hit by the geopolitical tension. 

Industry watchers are concerned that its sister firm Kia Motors, which is also suffering a sales slump in China, could face similar problem if suppliers refuse to supply parts. 

“At the moment, Kia’s factories are fully operating in China,” a Kia spokesperson told The Investor. “But there is always a possibility. We will do our best to prevent such an event.”

Hyundai’s shares closed 0.7 percent lower at 143,000 won on Aug. 30, rebounding from a decline of as much as 3.8 percent earlier in the day.

By Ahn Sung-mi (sahn@heraldcorp.com)

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