Hyundai resumes production at China plant after facing disruption in supply

Hyundai's sales in China plunged, leaving the company unable to pay a local supplier of fuel tanks. The supplier refused to provide the components when Hyundai delayed payment.

By: | Updated: August 30, 2017 11:04 AM

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Hyundai Motor Co. said Wednesday that it resumed production at its plants in China where the automaker has been working to resolve a dispute with a parts supplier that led to a complete production halt. It was the latest in series of challenges that have beset South Korea's largest automaker in the key market since a diplomatic row erupted in spring over South Korea's decision to deploy a U.S. missile defence system. It caused China's ire and prompting Chinese consumers to shun Korean cars. Hyundai's sales in China plunged, leaving the company unable to pay a local supplier of fuel tanks. The supplier refused to provide the components when Hyundai delayed payment.

Assembly lines at four plants operated by Beijing Hyundai Motor Co., the South Korean company's joint venture with BAIC Motor Corp., gradually stopped producing cars starting last week as the components ran out. They came to a full stop on Tuesday.

The supplier resumed providing fuel tanks Wednesday, a spokesman for the South Korean automaker said. Its China plants, three of them in Beijing and one in Changzhou, are gradually returning to production. The company is still in talks with the supplier to resolve the payment issue.

Hyundai reported the lowest quarterly profit since 2010 after its China sales plunged 64 percent during the April-June quarter from a year earlier.

Beijing opposed Seoul's decision to deploy the U.S. missile defence system. South Korea says the system is aimed at deterring North Korean aggression but China is worried that its powerful radars would peer into its territory.

During the first half of this year, Hyundai sold 321,000 vehicles in China, down 42 percent from a year earlier.

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