Economy

Hyundai Motor says will continue China JV with BAIC

Hyundai Motor says will continue China JV with BAIC”

"We continue to be in discussions over payment", a spokesman for the automaker said.

Last week, four Hyundai Motor factories in China - three in Beijing and one in Cangzhou - resumed operations after they were shut down when a local supplier that makes fuel tanks didn't provide parts due to a delayed payment, also thought to be roughly 18.9 billion won.

According to industry insiders, Beijing Hyundai is expected to encounter similar happenings until sales rebound.

Shares in Hyundai suppliers saw some of the worst drops among slides for raft of South Korean firms, as investors feared a shift to Chinese suppliers was underway.

Samsung Securities analyst Esther Yim said the internal disputes over suppliers signaled a prolonged crisis for the South Korean automaker.

Lee said, rising sales posted by Beijing Benz Automotive will drive the state-run Chinese company to pressure Hyundai to switch to local suppliers if suppliers refuse to cut down on price.

China has long opposed South Korea's move to install the USA anti-missile battery THAAD, and Chinese local media hints that the nation's latest retaliatory measures could lead to a possible termination of a long-time business partnership.

In the January-July period, Hyundai sold 351,292 vehicles in China, down 41 percent from 592,785 units a year earlier.

On Aug. 30, Hyundai's four plants in China resumed operations after a weeklong suspension due to parts supply issues.

On Wednesday Chinese media agency Global Times reported that BAIC Motor is fed up with Hyundai for its "greed and arrogance" over the supplier issue.

The construction of its fifth factory in Chongqing, capable of producing 300,000 units a year, has recently been completed. But it has not begun operation yet.

Hyundai has been at odds with partner BAIC Motor 1958.HK over supplier strategy, sources have said - a rift that appears to be at the root of some of its parts makers not being paid on time, leading to plant stoppages.



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