China suspends Hyundai-Kia imports following anti-trust violation
10/16/2008, 11:53 AM
By Drew Johnson
Hyundai-Kia is one of just a handful of major players in China, but the South Korea-based automaker has found itself in some hot water with the Chinese government. In fact, Hyundai-Kia hasn’t been allowed to import Korean-made vehicles into China since mid-September.
The revocation of Hyundai-Kia’s import permits stems from a reported anti-trust law violation. Following complaints from several Chinese dealers, the Chinese government discovered that Hyundai-Kia was backing some of its dealers through independent firms. As a result, Hyundai-Kia hasn’t been able to import vehicles from Korea to China since mid-September, according to Reuters.
Despite the setback, it’s not the end of the world for Hyundai-Kia. While the company is based in South Korea, only about 50,000 of the 520,000 vehicles Hyundai-Kia sells annually in China are sourced from Korea. The rest are made in China through joint ventures, which have not been impacted by the permit cancellations.
However, Hyundai-Kia is trying to make the leap to a premium brand in China, so it remains to be seen if the latest events with tarnish the automakers’ reputation.
10/16, 11:57 AM
posted by:
Lariat Luxury Locomotive Liner No.3
Screw Hyundai-Kia. Vehicles for the inept and bad drivers. I say we cut one apart and take a look at how they really make one.
10/16, 11:57 AM
posted by:
A4
jeeze since mid september and your just getting the story now eh
10/16, 12:08 PM
posted by:
johnnycanuck
So what does ‘backing some of its dealers through independent firms’ mean?
10/16, 12:42 PM
posted by:
RaineMan
Since when does China care what anyone does to make money?
10/16, 1:03 PM
posted by:
Stinky007
News gets out of China really hard :p
They control their internetz :p
10/16, 1:33 PM
posted by:
mayer_ray_nagin
Just another move by China to restrict imports. When it comes to international trade, China gets away with murder.
10/16, 3:58 PM
posted by:
pavlindrom
I know China… stole my neighbor’s job…
10/16, 8:29 PM
posted by:
moochung
Geez isnt that a bit RICH of china….Anti Trust Laws…WHAT??? the country that rips of car designs from the likes of fiat and alfa (to name just 2), and they get away with that…what the fark is wrong with the laws these days…their not worth the paper their written upon…..
10/16, 9:20 PM
posted by:
deutschetouring1337
Read through the lines people, Hyundai is refusing the sign over Technology and having the Chinese government own a percentage of profits made in China. The reason you’ll see China within the next couple of years come out with some stunners is due to their current regulation of the car industry which in order to sell cars in China you have to be in a joint venture with the Government basically signing over certain manufacturing technologies and income. GM has done it, VAG, a number of companies have in order to get into the emerging chinese market. Gotta pay to play.
10/16, 11:24 PM
posted by:
elviososa
I think you guys really need to dig deeper…it’s not just the violations…it’s a culture fight….why?? because Korean recently try to claim many Chinese Traditional Culture to be originated from Korea….One crazy claim is that “Kun Fu Zi” is Korean….what a mess.
10/17, 4:47 PM
posted by:
sharpie
“Kun Fu Zi” is Confucius for American readers.
10/18, 1:49 PM
posted by:
EionM
“Hyundai is refusing the sign over Technology and having the Chinese government own a percentage of profits made in China.”
Hyundai already has three joint ventures in China, and they sell a ton of cars. All of the new Beijing taxis are Hyundais, for example. This is about Korean-made cars, not Chinese ones; I’m guessing they don’t sell too many of the former because of the stupid fecking import duties (sorry, I’m in the market for a car at the moment and all but the smallest deathboxes in China are 3x the price they are in the US).
“Own a percentage of profits made in China”? That’s called “enterprise income tax”, I think.
“The reason you’ll see China within the next couple of years come out with some stunners is due to their current regulation of the car industry which in order to sell cars in China you have to be in a joint venture with the Government”
According to the latest foreign investment catalogue I have, “[m]anufacture of complete automobiles (including R&D activities)” is an encouraged activity. Based on this there does not appear to be any requirement (at least on paper) for a joint venture with any Chinese party, let alone with the government, for a foreign-invested car manufacturing plant. In general it’s very unusual for a joint venture partner to have to be a state-owned enterprise (although I have seen this requirement for example in some specific areas of media distribution and telecoms).
Selling cars isn’t on the restricted list either, although leasing them is (so for a dealership doing leasing, they would need to be in a joint venture with a Chinese partner, which they pretty much all are anyway). This explains why you can find even relatively obscure brands here (Spyker, for instance( if you look hard enough (and if you’re willing to pay the aforementioned 3x markup and extortionate additional duties, fees for license plates, and the list goes on).
The reason GM and VW have big Chinese joint ventures is almost certainly because at the time they entered the market, foreign investors had to be in a JV. That’s no longer the case in this industry, though.
The antitrust law in China only came into effect quite recently, so I’d suggest reading up on it and the facts of this case before jumping to any conclusions. This wouldn’t be the first time Hyundai has done something like this, though.