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Hyundai Stops China Production

It has halted auto production as tensions over a U.S. anti-missile system hurt its sales and left it unable to pay a supplier.

Hyundai Logo

SEOUL, South Korea (AP) — Hyundai Motor Co., South Korea's largest automaker, said Tuesday it has halted auto production at its plants in China as tensions between Seoul and Beijing over an U.S. anti-missile system hurt its sales and left it unable to pay a supplier.

All four of its factories that have been in operation in China had stopped manufacturing vehicles as of Tuesday after a local parts supplier refused to supply components when Hyundai delayed payment. The company did not provide more details of the payment issue. Production at assembly lines gradually stopped starting last week because of the lack of the components, a spokesman said.

Hyundai operates a joint venture, Beijing Hyundai Motor Co., with BAIC Motor Corp.

Hyundai's sales in China plunged 64 percent during the April-June quarter from a year earlier and its quarterly profit fell to the lowest level since 2010. Chinese consumers shunned South Korean cars because they are angry over Seoul's decision to deploy the U.S. missile defense system. South Korea says the defense 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, the company sold 321,000 vehicles in China, down 42 percent from a year earlier.

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