By Jhoo Dong-chan
The Chinese government’s economic retaliation against Korea over the deployment of a Terminal High Altitude Area Defense (THAAD) battery here more than halved Hyundai Motor’s sales in China last month.
Hyundai Motor and its affiliate Kia Motors sold 72,032 cars in China last month, down 52.2 percent from a year ago, officials said. Hyundai Motor sold 56,026, down 44.3 percent, and Kia Motors 16,006, down 68 percent.
This was the first time that the two carmakers’ monthly sales in the world’s most populous country have fallen below 100,000 since February 2016.
Beijing-Hyundai, the Korean carmaker’s joint venture in China, introduced the all-new Elantra Yuedong sedan last month but it failed to offset the firm’s poor performance there with sales of 8,018 so far.
Hyundai’s lackluster performance is attributable to the Chinese government’s trade retaliation and anti-Korean sentiment among consumers after the deployment of THAAD here, they said.
Protesting the Korean government’s decision to deploy the U.S. anti-missile system, Chinese consumers have boycotted Korean products while some of its competitors have provoked nationalism among the Chinese people to rack up their own sales.
Some Volkswagen dealerships in China are reportedly carrying out a special promotion with discounts of up to 16,000 yuan ($2,323) for customers who sell their Korean cars to buy their models.
Another Chinese carmaker is also offering a special gift for customers who cancel their orders for Korean cars.
Due to its poor performance, Hyundai Motor temporarily shut down its production facilities in Cangzhou, Hebei Province, for four days from March 24. The factory’s annual production capacity is around 300,000 vehicles.
Hyundai Motor’s Beijing factory, which has operated 24 hours a day, also decided to cut its production by halting the night shift.
“It is very unusual to see a 50 percent drop in sales in overseas markets. It is inevitable for us to reduce production under the present circumstances in China,” a Hyundai Motor official said. “I hope it won’t last long.”
However, prospects seem unfavorable for Hyundai.
The Global Times, an English newspaper under the auspices of China’s largest newspaper People’s Daily, said it will publicly stage a boycott campaign against Korean products.
Also, the Chinese government recently excluded consumer subsidies for electric vehicle models equipped with LG Chem batteries for no reason.
Due to the Chinese government’s decision, Beijing-Hyundai changed its battery supplier for the all-new Sonata plug-in hybrid electric vehicle to China’s CATL, and delayed its introduction to next February.
“It is impossible to control the situation, but we will do what we can in the market,” the official said. “We will enhance our corporate social responsibility activities, and continuously introduce new high-quality vehicles.”
Hyundai Motor and Kia Motors jointly sold nearly 1.8 million cars in China last year, accounting for some 22 percent of their total global sales.