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Hyundai sales slump in China over North Korea, standoff with Chinese partner

BEIJING/SEOUL — Hyundai is at loggerheads with its Chinese partner over efforts to cut supplier costs, as they grapple with cutthroat competition and the impact of a standoff between Beijing and Seoul. Hyundai, along with affiliate Kia, has been caught up in a political row over a missile defense system that is being deployed in South Korea, but opposed by China, as tensions grow over North Korean missile tests and last week's test of a nuclear bomb the North claims can be mounted on a missile. Sales of Hyundai cars in China have been falling, part of a backlash against South Korean brands over the missile system that China views as a threat to its own national security. On Tuesday, South Korea asked the United States to lift a limit on the explosive payloads it can use in the missile system. This as a North Korean missile, believed to be an intercontinental ballistic missile, was being tracked by intelligence services being moved on the ground toward North Korea's west coast and a possible launch site. That has come against the backdrop of ever tougher competition from local Chinese automakers. Until last year, Hyundai and Kia ranked third in China by sales. But Hyundai's sales alone have slumped 41 percent from January to July, fraying relations with local partner BAIC Motor Corp and making this the biggest crisis since Hyundai entered the Chinese market in 2002. Last month, Hyundai suspended production at its four China plants for a week after a French supplier refused to provide fuel tanks when its bills went unpaid. On Tuesday, Hyundai suspended production at one of its plants in China after a German firm went unpaid. Hyundai and BAIC — whose Beijing Hyundai joint venture is a 50:50 partnership — are divided over how to solve the issue of suppliers and tougher competition. Hyundai wants to protect its South Korean supply chain, while BAIC favors shifting to cheaper Chinese suppliers to cut costs, the people said. "BAIC wants to solve this aggressively and is ... asking Hyundai to change its sourcing strategy significantly and immediately," said the head of a Hyundai supplier based in Seoul, adding the idea was to source more locally from cheaper suppliers in China. Hyundai wants to solve this more gradually "over perhaps 5-10 years and do so in phases," the person said. BAIC declined to comment.

Car dealership gives man a new car after his is tagged with racist graffiti

Update: The Facebook post from the passerby mentioned is no longer available, and has been removed from the text. A man in Arkansas who found his pride and joy broken into and covered in racist graffiti has a new set of wheels, thanks to one generous car dealership. Reshod Johnson left his car parked outside of his place of work for just 15 minutes last week while he retrieved chairs for his son's third birthday party. When he returned, he found his belongings scattered across the street and racist terms spray painted on his car. "I just don't understand it. I don't do anything to hurt anybody," Johnson told THV11. "I don't go out looking for trouble." A friend spotted two white men fleeing the scene in a red truck. He made a police report, but as a full time student and former veteran with Christmas around the corner and a three-year-old at home, money is tight. Johnson made the painful decision to continue to drive his 2006 Nissan with the hateful messages intact, though he was keeping his young son away from it. "We're supposed to have advanced past this and to serve the country and to serve for everyone and to fight for rights and freedom for everyone and for this to happen, it's like a slap in the face and makes you wonder for what," Johnson told THV. When a passerby saw the damage, she became emotional and posted about the incident on Facebook. According to 9news.com, the post drew a ton of help and attention to Johnson's story. Steve Landers Kia saw Johnson's story and decided to help. They donated a new ride to Johnson just in time for Christmas. They said it was the least they could do for a veteran who experienced horrific random hate. "Times are hard out here and he's a veteran," an employee for Steve Landers Kia told 9News.com. "We're just trying to help the community out."Related Video: Weird Car News Kia Maintenance Ownership Safety vandalism veterans graffiti racism

Kia calls reports of second US plant 'groundless'

In discussing how Kia planned to use a focus on quality to raise its brand perception and take the fight to BMW and Audi instead of Toyota, a recent article in Automotive News Europe said one of the primary constraints was production capacity; Kia simply doesn't have the ability to make enough cars to meet its aims with the plants it has.
The CEO of Hyundai-Kia is said to be reluctant to build more plants because of that focus on quality and the fact that its suppliers are stretched to the limit. The effects of that position are being felt right now with both makers losing market share, as in the case of Hyundai not being able to make enough of its Veloster Turbo for the US market.
A South Korean newspaper apparently reported last week that Kia was planning to build a second factory in Georgia with capacity for up to 150,000 units annually, and that the company would break ground as soon as this month on "KMMG2." Kia has responded to the news by saying, "The report is all groundless." The mayor of West Point, site of the current KMMG plant, said he didn't know anything about such plans, nor did the Georgia department of economic development have knowledge of a new Kia factory.