Hyundai shuts Cangzhou plant for a week

New Straits Times - - Business World -

SEOUL: South Korea’s Hyundai Mo­tor has sus­pended pro­duc­tion at one of its Chi­nese fac­to­ries for a week, said a me­dia re­port on Sun­day, fu­elling con­cern that a diplo­matic stand­off may be hurt­ing sales in the car­maker’s top mar­ket.

South Korean com­pa­nies, from cos­met­ics firms to re­tail­ers, said they were be­ing tar­geted in China be­cause of Beijing ’s ob­jec­tions to a planned de­ploy­ment of the United States Ter­mi­nal High Al­ti­tude Area De­fence sys­tem in South Korea.

News of Hyundai’s China plant clo­sure, re­ported by on­line me­dia Cho­sunBiz, drove shares of the com­pany down as much as three per cent yes­ter­day. The shares later re­cov­ered to trade down 1.5 per cent.

Shares in Hyundai’s af­fil­i­ates, Kia Mo­tors and Hyundai Mo­bis, also traded lower.

Cho­sunBiz re­ported Hyundai’s China joint ven­ture had told sup­pli­ers it would idle the fac­tory in Cangzhou, He­bei Prov­ince, from last Fri­day to Satur­day, to check its pro­duc­tion line.

The move comes less than six months af­ter the plant started op­er­a­tions. Hyundai has three other fac­to­ries in China.

In­dus­try of­fi­cials and an­a­lysts said the sus­pen­sion might be aimed at bring­ing down in­ven­to­ries, given slow­ing sales in China due to po­lit­i­cal ten­sion and com­pe­ti­tion from lo­cal play­ers. Reuters

BLOOMBERG PIC

Peo­ple’s Bank of China gov­er­nor Zhou Xiaochuan says China may fur­ther open up its fi­nan­cial sec­tor, such as in bank­ing, in­sur­ance, in­vest­ment bank­ing, se­cu­ri­ties firms and pay­ment sys­tems.

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