Hyundai to Ship Cars from China to Southeast Asia

Hyundai Motor Co. plans to supply cars to markets in southeast Asia from its factories in China, Reuters reports.

Hyundai confirms the plan, which comes as softening sales leave the carmaker with underutilized production capacity there. Hyundai operates five assembly plants in China.

The company has begun to recover from a diplomatic spat between China and South Korea last year that caused a 50% drop in sales through the first nine months of 2017. But the rebound has been hurt by the same product mismatch that plagues Hyundai sales in other markets: too many sedans and not enough SUV/crossover vehicles.

A Reuters source says Hyundai might also ship cars from China to Europe. A company spokesman says exports to any market won’t begin until at least the end of this year. Nor has a decision been made about which models to ship.

Hyundai’s sales in China were up 17% year-on-year through July. But Reuters says the carmaker’s volume in July plummeted 40% to 30,000 vehicles.