Beijing Hyundai Auto Finance fined for violating credit data management laws

Hyundai Capital CEO Chung Tae-young Korea Times file

By Lee Kyung-min

Beijing Hyundai Auto Finance, Hyundai Capital's corporate body in China, was fined for violating credit data management laws there amid declining profits in China, industry sources said Friday.

The People's Bank of China fined the car finance firm 150,000 yuan ($21,800), Aug. 19, for violating laws governing the collection, provision, storage and verification of credit information.

Hyundai Auto Finance was jointly established by Hyundai Motor, its financing subsidiary Hyundai Capital and Beijing Automotive Industry Holding (BAIC).

The scrutiny from the Chinese central bank came after the company was fined 300,000 yuan for failing to abide by relevant rules in disclosing fees for services in November 2018.

The repeated punishment may burden Hyundai Motor's growth plan in China. Beijing Hyundai, Hyundai Motor's corporate body in China, reported net losses of 540 billion won ($455 million) in the January-June period this year, already surpassing last year's annual losses of 523.4 billion won. It recorded over 2.72 trillion won in sales the first six months, down 35 percent from a year earlier.

It sold 181,000 vehicles in China in the January-June period of 2020, down 33.4 percent from a year earlier. The figure is less than two-thirds of the 300,000 it sold during the first half of 2017 when the carmaker heavily struggled due to anti-Korea sentiment in China following conflicts involving the deployment of a U.S. Terminal High Altitude Area Defense (THAAD) system in Korea. It reported an operating loss of 210 billion won in 2017 there.

Also demonstrating the Korean carmaker's poor performance in China is the sales of over 4.83 million vehicles in the second quarter of this year, up 2.7 percent from the same period in 2019. This is an indication that Hyundai was left out of the rapid rebound in the car market which showed a solid improvement much sooner than expected in the country in which the first case of COVID-19 was reported.

No immediate recovery in earnings is expected from Beijing Hyundai Auto Finance as its net profit has slumped for the past three consecutive years following the THAAD dispute, compounded by the COVID-19 pandemic. It recorded 487 million yuan in net profit in 2019, a drop from 555 million yuan in 2018. The figure was a significant drop from its net profit of 722 million yuan in 2017.