Hyundai Motor hit again by supply disruption in China

05 Sep, 2017 8:38 am

SEOUL (Reuters) – Hyundai Motor said it had suspended production at one of its China factories on Tuesday after a supplier refused to provide parts due to delays in payment – its second such incident in as many weeks.

Frayed relations with suppliers to its joint venture with BAIC Motor Corp Ltd have become a fresh headache for the South Korean automaker in China, which has seen sales slump in the wake of diplomatic tensions between the two nations.

The Hyundai-BAIC venture had only just resumed production at four China plants on Aug. 30 after supply problems halted production for about a week. Then, one French supplier refused to provide fuel tanks due to non-payment.

This time, another firm has refused to provide parts for air intake systems, a representative for the automaker said, declining to identify the supplier.

The joint venture’s three other Chinese factories remain operational.

Hyundai announced on Monday that it had replaced the head of its China operations with Tao Hung Than, who is of Chinese descent.

South Korean firms have been hit by a Chinese backlash over Seoul’s decision to deploy a U.S. missile defence system to counter threats from nuclear-armed North Korea. China says the system poses a threat to its national security.

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