SEOUL/BEIJING (Reuters) - Hyundai Motor Co (005380.KS) plans to ship China-made cars to Southeast Asia, its China joint venture and two people familiar with the matter told Reuters, as a plunge in Chinese sales has left much of its massive local manufacturing capacity idled.
FILE PHOTO: A labourer works at the main factory of Hyundai Motor in Ulsan, about 410 km (256 miles) southeast of Seoul, July 13, 2012. REUTERS/Lee Jae-Won/File Photo
Hyundai once ranked third by China sales alongside affiliate Kia Motors Corp (000270.KS). But just as it opened its fifth factory in the country last year, a diplomatic dispute saw Chinese consumers turn against South Korean goods, damaging Hyundai’s sales and brand image.
Diplomatic ties have since normalized but Hyundai’s recovery has been erratic. The automaker booked China sales of 30,018 cars in July, down 40 percent from July last year and its lowest monthly total since the 2008 global financial crisis. Yet sales for January-July are up 17 percent.
“A China recovery will take time. Hyundai needs a survival plan,” said one of the people with direct knowledge of Hyundai’s China operations, who were not authorized to speak to the media and so declined to be identified.
The experience exposed South Korean companies’ reliance on the Chinese market, pushing the Seoul government to court counterparts in Southeast Asia where the number of Korean cars is paltry compared with those of neighboring Japan.
“Hyundai is considering (exporting China-made vehicles) to emerging markets such as Southeast Asia,” the person said. “Europe may also be a consideration.”
Most vehicles foreign automakers build in China with local joint-venture partners are destined for the domestic market. Among those that export China-made vehicles, General Motors Co (GM) (GM.N) ships to the
