Hyundai to ship China-made cars to Southeast Asia amid recovery

SEOUL/BEIJING – Hyundai Motor Co plans to ship China-made cars to Southeast Asia, its China joint venture and two people familiar with the matter told Reuters, as a plunge in Chinese sales has left much of its massive local manufacturing capacity idled.

SEOUL/BEIJING — Hyundai Motor Co. plans to ship China-made cars to Southeast Asia, its China joint venture and two people familiar with the matter told Reuters, as a plunge in Chinese sales has left much of its massive local manufacturing capacity idled.

Hyundai once ranked third by China sales alongside affiliate Kia Motors Corp. But just as it opened its fifth factory in the country last year, a diplomatic dispute saw Chinese consumers turn against South Korean goods, damaging Hyundai’s sales and brand image.

Diplomatic ties have since normalized but Hyundai’s recovery has been erratic. The automaker booked China sales of 30,018 cars in July, down 40% from July last year and its lowest monthly total since the 2008 global financial crisis. Yet sales for January-July are up 17%.

“A China recovery will take time. Hyundai needs a survival plan,” said one of the people with direct knowledge of Hyundai’s China operations, who were not authorized to speak to the media and so declined to be identified.

The experience exposed South Korean companies’ reliance on the Chinese market, pushing the Seoul government to court counterparts in Southeast Asia where the number of Korean cars is paltry compared with those of neighboring Japan. —