Hyundai Motor plans to ship China-made cars to S-E Asia

SEOUL/BEIJING: Hyundai Motor Co plans to ship China-made cars from its joint-venture to Southeast Asia, said sources, as a plunge in Chinese sales left much of its massive local manufacturing capacity idled.

Hyundai was 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.

The carmaker booked China sales of 30,018 cars in July, down 40 per cent from the same period last year and its lowest monthly total since the 2008 global financial crisis. Yet sales for JanuaryJuly are up 17 per cent.

“A China recovery will take time. Hyundai needs a survival plan,” said one source.

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 South Korean cars was paltry compared with those from Japan.

“Hyundai was considering (exporting China-made vehicles) to emerging markets such as Southeast Asia,” said the person. “Europe may be a consideration.”

Across Asean, sales of South Korean cars are growing, with those of Hyundai-Kia rising 26 per cent on year to 71,847 cars in January-June in Indonesia, Malaysia, the Philippines, Thailand and Vietnam, showed data from LMC Automotive.