(Bloomberg) -- Hyundai Motor Co. halted production at a plant in China Tuesday after a supplier stopped delivery of parts for air-intake systems, suspending operations for the second time in three weeks in its biggest market.
The China-based supplier, partly owned by a German company, has refused to deliver the parts since the weekend because of delayed payments from the carmaker's local venture, a Hyundai spokesman in Seoul said by phone. Beijing Hyundai Motor Co. is in talks with the vendor to resume supplies and there is a possibility that operations at the plant in Cangzhou, Hebei, can restart Wednesday, the spokesman said.
The shutdowns are the latest troubles for Hyundai in China, where its first-half sales plunged 42 percent amid a consumer backlash over political tensions and failure to introduce more popular car models. Beijing Hyundai, whose sales also suffered due to heavy discounting by rivals, appointed a new chief last week following the first round of shutdowns which struck all four of its operational factories in the country.
Beijing Hyundai, a venture between the South Korean carmaker and BAIC Motor Corp., has five plants in China. The newest one, in Chongqing, isn't operational yet. The remaining three plants have sufficient supplies of air-intake parts and are operating normally, the Hyundai spokesman said.
Hyundai shares fell 0.7 percent to 139,000 won as of 11:33 a.m. in Seoul. BAIC shares traded in Hong Kong declined 0.3 percent.
The venture was forced to suspend production gradually at the four factories two weeks ago after poor sales led to delayed payments and one vendor suspended deliveries of fuel tanks. Operations resumed last week.
Click here to read a Gadfly column on the Hyundai shutdown
Hyundai has struggled to recover from a consumer backlash in China after the South Korean government's decision to to deploy a U.S. missile-defense system. The company has also been hurt by a sedan-heavy lineup as the market gravitated toward SUVs and competing automakers' cheaper offerings.
--With assistance from Tian Ying
To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.net.
To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, Lena Lee
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