KIA considering China production halt amid sales slowdown
South Korean automaker KIA Motors is considering suspending production at one of its Chinese factories, just days after a similar announcement from fellow car producer Hyundai, amid growing concerns about slumping sales in the world's biggest auto market.
In a statement released Sunday, KIA said a suspension of operations at one of its plants in Yancheng, east China's Jiangsu Province was under review “to secure production efficiency and profitability.”
Despite recovering by around nine percent last year, KIA's sales in China failed to reach targets. The company has three production plants in Jiangsu Province, with a combined capacity of 890,000 vehicles per year.
KIA's statement followed a similar announcement by Hyundai on Friday, with South Korea's largest automaker saying it was considering suspending production at its No.1 plant in Beijing.
Hyundai said it was “taking voluntary retirements” from staff at its oldest plant in China, amid a decline in sales.
Once China's third-biggest auto brand, Hyundai has the capacity to produce more than 1.6 million vehicles in China, but only sold 820,000 in 2017.
Hyundai and KIA are two affiliated brands, forming the world's fifth-largest automaker. However, car buyers worldwide are turning away from “Made in South Korea,” with the country's vehicle exports declining 1.2 percent year-on-year in February.