Hyundai to use idle capacity in China for exports to SE Asia

blackwasp · 3rd September 2018, 18:14

According to a media report, Hyundai is planning to use the excess capacity of its plants in China to cater to markets in Southeast Asia. The move comes after a diplomatic dispute between China and South Korea caused the former to shun the latter's goods, including automobiles.

In 2012, the company had a market share of 10.5 percent which reduced to 8.1 percent before the dispute. While the diplomatic crisis was resolved, Hyundai’s market share today stands at just 4.4 percent. The Korean company aims to sell 9,00,000 cars in the current year, compared to last year's tally of 7,85,000 units. The total installed capacity across the five plants in China is almost double at 16.5 lakh units.

It was also reported that exporting from China to countries like Vietnam could attract lesser duty, compared to South Korea (50% instead of 78%). Growth of Hyundai and Kia across Southeast Asia has been 26 percent YoY, while total vehicle sales grew by 4 percent to a total of 34.1 lakh units.

Hyundai to use idle capacity in China for exports to SE Asia-dsc03471.jpg

Source: Reuters

Link to the Team-BHP News

SmartCat · 3rd September 2018, 22:41

Last year, South Korea decided to deploy a potent Air Defense system (called THAAD) to protect itself against North Korean missiles. But this system's radars are powerful enough to "peek" into China and track fighter aircraft take-off's/landings on its East coast. So the angry Dragon ranted and raved about this deployment and as a part of its pressure tactics, "encouraged" Chinese citizens to boycott South Korean brands. The net result is this - Hyundai's market share halved from 10% to 4% and is now stuck with excess capacity.

In 2012, Japanese brands like Honda/Toyota/Nissan suffered because of similar Chinese Govt retaliation.
https://en.wikipedia.org/wiki/2012_C...demonstrations

By the way, this is exactly what experts fear if Trump goes ahead with further tariffs on China. That they will strike against American car companies like GM, FCA and Ford that operate in and have factories in China.

Chinese strategy looks like Apne Paav Par Kulhadi Maarna to me though.

3rd September 2018, 18:14	#1
blackwasp Senior - BHPian Join Date: Apr 2015 Location: Navi Mumbai Posts: 2,979 Thanked: 26,352 Times View My Garage	Hyundai to use idle capacity in China for exports to SE Asia According to a media report, Hyundai is planning to use the excess capacity of its plants in China to cater to markets in Southeast Asia. The move comes after a diplomatic dispute between China and South Korea caused the former to shun the latter's goods, including automobiles. In 2012, the company had a market share of 10.5 percent which reduced to 8.1 percent before the dispute. While the diplomatic crisis was resolved, Hyundai’s market share today stands at just 4.4 percent. The Korean company aims to sell 9,00,000 cars in the current year, compared to last year's tally of 7,85,000 units. The total installed capacity across the five plants in China is almost double at 16.5 lakh units. It was also reported that exporting from China to countries like Vietnam could attract lesser duty, compared to South Korea (50% instead of 78%). Growth of Hyundai and Kia across Southeast Asia has been 26 percent YoY, while total vehicle sales grew by 4 percent to a total of 34.1 lakh units. Source: Reuters Link to the Team-BHP News Last edited by blackwasp : 3rd September 2018 at 18:19.
	(2) Thanks

3rd September 2018, 22:41	#2
SmartCat Team-BHP Support Join Date: Jun 2007 Location: Bangalore Posts: 6,475 Thanked: 43,438 Times View My Garage	Re: Hyundai to use idle capacity in China for exports to SE Asia Last year, South Korea decided to deploy a potent Air Defense system (called THAAD) to protect itself against North Korean missiles. But this system's radars are powerful enough to "peek" into China and track fighter aircraft take-off's/landings on its East coast. So the angry Dragon ranted and raved about this deployment and as a part of its pressure tactics, "encouraged" Chinese citizens to boycott South Korean brands. The net result is this - Hyundai's market share halved from 10% to 4% and is now stuck with excess capacity. In 2012, Japanese brands like Honda/Toyota/Nissan suffered because of similar Chinese Govt retaliation. https://en.wikipedia.org/wiki/2012_C...demonstrations By the way, this is exactly what experts fear if Trump goes ahead with further tariffs on China. That they will strike against American car companies like GM, FCA and Ford that operate in and have factories in China. Chinese strategy looks like Apne Paav Par Kulhadi Maarna to me though.
	(4) Thanks