🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

Hyundai China plant restarts but investors fret over supplier problem

Published 08/09/2017, 04:47
Updated 08/09/2017, 04:50
© Reuters. FILE PHOTO: Men cylce past an advertising billboard for Hyundai cars opposite the plant of Hyundai Motor Co in Beijing
0593xq
-
012330
-
005380
-
1958
-

By Hyunjoo Jin

SEOUL (Reuters) - Hyundai Motor (KS:005380) said a Chinese car plant had resumed production after a delayed payment to a parts maker halted operations this week, but the apparent lack of a clear solution to the problem sent shares in the automaker and its suppliers sliding.

Hyundai is at odds with its Chinese joint venture partner BAIC Motor (HK:1958), with the latter wanting to shift to cheaper Chinese suppliers to better compete with local brands, sources familiar with the matter have told Reuters.

The South Korean auto giant said operations at the plant in Heibei province had 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 due to payment problems.

"We continue to be in discussions over payment," a spokesman for the automaker said on Friday.

Samsung (LON:0593xq) Securities analyst Esther Yim said the supplier problems 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 apparent infighting signalled a prolonged crisis for the South Korean automaker.

Hyundai is already dealing with a slump in sales in the world's biggest auto market due to diplomatic tensions between the two nations and fierce competition from local brands.

Shares in Hyundai were down 3 percent and they have lost about 7 percent since reports of the payment problems first emerged. Shares in top supplier Hyundai Mobis (KS:012330) tumbled as much as 6.6 percent on Friday and they have fallen some 10 percent in the same time period.

© Reuters. FILE PHOTO: Men cylce past an advertising billboard for Hyundai cars opposite the plant of Hyundai Motor Co in Beijing

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.