UPDATE: New Supply Problems Idle Hyundai Plant in China

Hyundai Motor Co.’s assembly plant in Changzhou has suspended production after a Germany supplier of air intake systems halted shipments because it hadn’t been paid, The Nikkei reports.

The factory is among four Hyundai facilities that were idled last week when a French supplier of fuel tanks suspended deliveries for the same reason. That issue has been resolved, according to the newspaper.

Hyundai blames the latest disruption on a nonpayment by venture partner BAIC Motor Corp. In an unusually blunt rebuke, Hyundai CEO told reporters earlier today that partners in the 50:50 venture should not make unilateral decisions.

Sources tell Reuters that BAIC is eager to immediately shift to local and less expensive Chinese vendors. The sources say Hyundai wants to defend its Korean supply chain for now and make the transition to local vendors over 5-10 years.

Like other South Korean companies, Hyundai is struggling with slumping sales and operational challenges brought on by China’s objection to Korea’s deployment of a U.S.-supplied missile defense system. China regards the system as a threat to its national security.