The logo of Hyundai Motor is seen on the glass door at its branch in Seoul on January 2014. Hyundai launched the new Sonata sedan in South Korea on Monday in the model's first makeover in nearly five years - AFP Photo.
SEOUL: Shares in Hyundai Motor and its suppliers slid on Friday on fresh worries over its position in China after highly critical state newspaper comments - even as it managed to get a Chinese car plant restarted.
The South Korean automaker has been at odds with partner BAIC Motor over their supplier strategy, sources have said - a rift that appears to be at the root of problems over some of its European suppliers not being paid on time, leading to plant stoppages.
China’s state-run Global Times weighed in on the thorny situation, running an article in its English edition on Thursday that cited unidentified sources describing BAIC as highly critical of Hyundai.
The newspaper followed up with commentary on Friday lambasting Seoul for its decision to deploy the US anti-missile defense system THAAD - a diplomatic standoff that has been hurting Hyundai and other South Korean firms that are highly reliant on the Chinese market.
Sources have said BAIC wants to shift to cheaper Chinese suppliers to cut costs amid intensifying competition in the world’s biggest auto market, while Hyundai want to protect its current supply chain.
Shares in Hyundai suppliers were battered most with Hyundai Mobis tumbling as much as 6.6% on fears a shift towards Chinese suppliers was under way. Hyundai Motor fell 3.6%.
BAIC declined to comment and said it was not aware of the Global Times articles.
Hyundai said in a statement that a cooperative relationship with its partner would continue and ”the two companies plan to continue various dialogue to strengthen competitiveness in the Chinese market.”
The automaker said earlier in the day that operations at its plant in Hebei province resumed on Thursday afternoon after being suspended since Tuesday - the second time in as many weeks that it has had to halt production at Chinese plants.
“We continue to be in discussions over payment,” a spokesman for the automaker said.
Samsung Securities analyst Esther Yim said the internal disputes over suppliers seemed unresolved, helping trigger fresh slides in shares of both Hyundai and its supplier affiliates on Friday.
“Investors are frustrated that Hyundai is just blaming the political situation, and doing little to address the problem.
Hyundai is a silent bystander,” she said, adding that the apparent infighting signalled a prolonged crisis for the South Korean automaker.
But Hyundai and its suppliers were not the only ones to feel the pain, as the Global Times referred to THAAD as ‘a malignant tumour’.
“Have the conservatives in South Korea eaten kimchi until they’ve become confused?” the unsigned article said, referring to the staple Korean side dish of fermented vegetables.
Lotte Shopping whose supermarket stores in China have been shut down for months in the wake of diplomatic tensions, fell 4.1%, and South Korea’s top comestic firm AmorePacific slumped 4.3%. - Reuters
