Canadian Manufacturing

Hyundai halts China production in dispute over U.S. anti-missile system

Chinese consumers have shunned South Korean cars because their leaders are unhappy over Seoul's decision to deploy a U.S. missile defence system to defend against North Korea


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SEOUL, Korea, Republic Of—Hyundai Motor Co., South Korea’s largest automaker, has halted auto production at its plants in China as tensions between Seoul and Beijing over an U.S. anti-missile system hurt its sales and left it unable to pay a supplier.

All four of its factories that have been in operation in China had stopped manufacturing vehicles as of Aug. 28 after a local parts supplier refused to supply components when Hyundai delayed payment. The company did not provide more details of the payment issue.

Production at assembly lines gradually stopped starting last week because of the lack of the components, a spokesman said.

Hyundai operates a joint venture, Beijing Hyundai Motor Co., with BAIC Motor Corp.

Hyundai’s sales in China plunged 64 per cent during the April-June quarter from a year earlier and its quarterly profit fell to the lowest level since 2010. Chinese consumers shunned South Korean cars because they are angry over Seoul’s decision to deploy the U.S. missile defence system.

South Korea says the defence system is aimed at deterring North Korean aggression but China is worried that its powerful radars would peer into its territory.

During the first half of this year, the company sold 321,000 vehicles in China, down 42 per cent from a year earlier.


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