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Hyundai suspends plant in China due to overcapacity

Hyundai Motor Company has verified it has briefly shut down a single of its four Chinese vehicle assembly vegetation thanks to weak product sales in the state, according to neighborhood reports.

The South Korean automaker this 7 days confirmed it has suspended functions at its Chongqing plant in China’s southwestern Sichuan province considering the fact that the commencing of the yr to boost generation performance amid reduced potential utilisation in the region.

A corporation spokesperson informed reporters “the Chongqing manufacturing facility is a smaller-motor vehicle oriented factory and we have temporarily stopped producing automobiles there as section of our strategy to improve effectiveness and improve our solution line-up”.

The 300,000 device/year Chongqing facility was accomplished in 2017 at a charge of US$1.3bn and was partly refurbished in 2019 to accommodate electrical car or truck (EV) manufacturing.

An unnamed Hyundai executive instructed the Chinese media “the Chongqing plant halted production in December and most workers have been set on leave”.

Although Hyundai is undertaking properly in mainstream regional marketplaces globally, which includes Europe and North The usa, it has struggled in the Chinese current market considering the fact that an unofficial boycott of South Korean brand names in 2017 – soon after a diplomatic spat flared up between the two countries in excess of the deployment of the US’ THAAD anti-missile process in South Korea.

Immediately after peaking at just about 1.2 million models in 2016, Hyundai’s Chinese manufacturing unit product sales plunged by just about 30% to 814,000 units in 2017 and ongoing to drop in subsequent decades to just more than 360,000 units in 2021. The brand’s profits in the region last calendar year were being reported at 385,000 models – a quarter of what they had been five years ago.