By on October 31, 2017

2018 Hyundai Sonata Sport - Image: Hyundai

When it comes to the positively frosty relationship between China and South Korea, this is the part of the movie where the two countries bump into each other at the bookstore and realize they should work out their troubles instead of giving each other the silent treatment. You know, for the kids.

For South Korea, China’s decision to warm up the relationship — which soured after the jittery country placed U.S.-supplied defensive missiles on its soil — is the best news its auto manufacturing sector has heard in ages. Perhaps soon it won’t be frowned upon to own a Hyundai or Kia in Beijing.

As Reuters reported yesterday, both countries have agreed to patch things up and move past last year’s decision to install THAAD anti-missile batteries in South Korea. The mobile missile launchers are designed as an extra level of protection against possible aggression from the nuclear-armed North Korea.

China, however, found the missiles to be particularly provocative. Not because China remains a tepid ally of North Korea’s authoritarian regime, but because it felt THAAD’s powerful radars could peek into its airspace. In response, South Korea’s tourism industry, as well as its manufacturing and entertainment industries, took a heavy hit in China.

Owning or buying a Korean car quickly became something to avoid. With a market as large as China’s, that spelled extra turmoil during a troubled time at Hyundai Motor Company. The company’s U.S. sales have tapered off, leaving the automaker scrambling to build new crossovers in an attempt to rekindle the fire.

According to The Korea Herald, Chinese Hyundai sales have fallen 37.2 percent over the first nine months of 2017. Kia sales fell 40.0 percent. That’s a big chunk taken out of the automaker’s global volume.

“We see a chance to recover sales on a gradual basis if the official ‘normalization of ties’ leads to easing of anti-South Korean sentiment,” a Hyundai official told the publication. “In the case of the automobile market, the Chinese government actually did not block consumption of South Korean cars, unlike in the tourism industry.”

For Ssangyong Motor Company, the move could mean its shelved joint Chinese plant plans might get a rethink. You’ll recall Ssangyong began looking at entering the American market after groundwork for a China plant went nowhere. (After last week’s board of directors vote, there’s no still word on whether we’ll see a new brand sold on this side of the Pacific.)

“We will have to wait and see how our partner will react to the thawing relations between Seoul and Beijing,” a Ssangyong official told The Korea Herald.

[Image: Hyundai]

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7 Comments on “Hope for Hyundai? China Agrees to Ignore South Korea’s Missiles...”


  • avatar
    hamish42

    I have a long daily commute – 3 to 4 hours daily (in good weather). We have a car in the family that is only for commuting – the mileage is horrendous as it is. We looked very hard at an Elantra GT, almost bought it. But, if there’s any place in the world that looks like trouble right now it is the China/Korean Peninsula. The more we read about the potential there, the more afraid we got of putting out an investment into a Korean company. Who knows? . So, long story short, I have a 2018 Honda Fit Sport 6M in “Orange Fury”. It’ll do the job.

    • 0 avatar
      PandaBear

      You are buying a car, not an investment.

      There are always aftermarket parts and US production and OEM for the parts.

    • 0 avatar
      TMA1

      Sure, because when North Korea starts firing missiles, they’re definitely going to spare Japan. Or did you get one of those Chinese-built Fits?

    • 0 avatar
      strafer

      3-4 hour commute daily with a Fit that spins at 3500 rpm/70 mph does not sound enjoyable.

    • 0 avatar
      bd2

      As stated, if war does break out, Japan won’t be spared.

      Also, Hyundai builds the GT (aka i30) in both Korea and the Czech Republic.

      H/K placed too much emphasis on the China market for growth despite the relationship being fraught with geopolitics.

      Hence, Kia’s planned move into the Indian auto market (where Hyundai is already a major player).

  • avatar
    cleek

    I understand your concern, but Hyundai does have a good portion of their supply chain and mfg in the US. Elantras are made in AL as well as KR. Not sure about the GT though.

    https://www.hyundaiusa.com/new-thinking/built-in-usa.aspx

  • avatar
    jpolicke

    Let’s suppose Kim decided to act on his fantasy of conquering South Korea, and the USAF lost all the keys to the bombers and didn’t vaporize Pyongyang. The Norks would triumphantly enter the Hyundai offices and find.. nothing. The bank accounts would contain nothing, the contents having been wired out of the country days before. Same with all the intellectual property, having been FTPd to Hyundai’s new world headquarters somewhere in the USA where they had just chartered themselves as a US corporation. They’d be just down the road from the LG and Samsung world HQs. Realtors would be working feverishly to find homes for all the Korean employees that just arrived as refugees.

    Various US states would be in a bidding war to entice H/K to locate new assembly plants while the Norks try to figure out how to reverse engineer and build cars in the stripped facilities that they could only sell to China.

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