Sales in China Remain Sluggish

Hyundai Motor’s plant in Beijing, China

Hyundai Motor Co. is planning to temporarily stop the operation of its first plant in Beijing with its sales volume in China dropping. It is going to cut back on manpower and facilities in order to deal with oversupply.

The temporary shutdown by Beijing Hyundai, a joint-venture between BAIC Motor and Hyundai Motor, is scheduled for May. The joint venture’s first plant in China was put into operation in 2002 and has produced approximately 300,000 vehicles a year.

On the face of it, the temporary production suspension has to do with the fact that the vicinity of the plant has been changed into residential zones and residents in the areas are complaining about the operation of the plant. However, it is attributable to Hyundai Motor’s concerns over oversupply in China.

The company sold 740,000 or so vehicles in China last year and this amount is less than 50 percent of the annual manufacturing capacity of its facilities in the country. There, the company’s sales volume has dropped since China’s THAAD retaliation two years ago while the company has failed to catch up with the market trends including an ever-increasing popularity of SUVs.

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