Hyundai shuts Cangzhou plant for a week
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
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.