Hyundai plant in China resumes operations

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Hyundai plant in China resumes operations

Hyundai Motor’s factory in Cangzhou, Heibei, resumed operations after it was suspended on Tuesday morning due to an overdue payment to a supplier.

According to the automaker on Friday, the plant started producing cars from late Thursday as its German supplier of air intakes provided parts to the plant even though the overdue payment issue remains unsolved.

The plant had been suspended after the supplier refused to supply parts due to an overdue payment estimated to be 18.9 billion won ($16.7 million).

“The operations has resumed for the time being, but we don’t know when this kind of situation will happen again as the overdue payment issue hasn’t been figured yet,” a spokesperson from Hyundai Motor said.

Last week, four Hyundai Motor factories in China - three in Beijing and one in Cangzhou - resumed operations after they were shut down when a local supplier that makes fuel tanks didn’t provide parts due to a delayed payment, also thought to be roughly 18.9 billion won. The four factories had been shut for about a week.

“The major reason for consecutive shutdowns is largely due to the decline in sales of Hyundai cars in China,” the spokesperson added.

Hyundai Motor’s Chinese unit Beijing Hyundai Motor - a 50-50 joint venture between Hyundai Motor and BAIC Motor - has been facing a severe sales decline in China ever since Seoul decided to deploy the U.S.-led Terminal High Altitude Area Defense antimissile system. Negative consumer sentiment toward Korean companies has hit the carmaker.

The relations between Hyundai and BAIC Motor seem to be deteriorating. On Wednesday Chinese media agency Global Times reported that BAIC Motor is fed up with Hyundai for its “greed and arrogance” over the supplier issue.

Following the report a Hyundai Motor spokesperson said that “it is a malicious rumor without grounds.”

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