April 20, 2024

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[THE INVESTOR] Hyundai Motor  Group on Sept. 4 said it will allot 250 billion won (US$221 million) to its parts suppliers in China that have suffered sales slump as troubles continue in its largest market.
 
“We will make an advanced payment of 250 billion won to our suppliers in China as part of the investment for (improving) the molding facility,” said Hyundai Motor CEO Chung Jin-haeng at a minister-led automotive industry meeting. The investment -- which in the past was provided in several installments over five to six years -- will help boost liquidity for the cash-strapped suppliers who have suffered due to Hyundai and Kia’s protracted sales slump.

The combined sales of the two carmakers declined 47 percent on-year to 429,000 units in the first half of this year, due to a consumer backlash after Seoul’s plans to deploy a US missile defense system THAAD. 

The fresh funds are in addition to the auto giant’s pledged investment of 150 billion won to suppliers, announced in July. 

Hyundai’s China woes show no signs of recovery as one of its Chinese plants was forced to halt operationd due to a supply disruption, its second shutdown in the country in less than a month. Its Cangzhou factory in Hebei province suspended operations earlier on Sept. 5 when a German supplier refused to deliver air-intake systems when Hyundai delayed payments.

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