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Chinese Authorities Recall 44,404 Hyundai Group Cars. Is It Economic Retaliation From China?
Thousands of Hyundai group cars have been recalled in the Chinese market by Chinese authorities citing various problems, but could actually be China’s way of economic retaliation.
43,764 units of the Hyundai Santa Fe, 601 units of the Kia Borrego, and 40 units of the Kia Sorento were all recalled in China recently. Recalls are not so uncommon in the automotive world, as manufacturers often realise over long term testing and feedback, that their vehicles have an underlying problem. It is then that an automotive company issues orders for a recall.
However, in this case, it wasn't Hyundai or Kia which recalled the vehicles. In China, the local authorities have the rights to recall vehicles, and these recalls were given by the General Administration of Quality Supervision, Inspection and Quarantine, and not the manufacturers.
The reason for the recall according to Chinese authorities was that the Hyundai Santa Fe had a defect that could cause the engine to fail, the Kia Borrego had loose wheel nuts, and the Kia Sorento had a defective engine pipe that could leak and potentially cause a fire. The reasons for the recall seems justified until one looks at it from another angle.
China and South Korea have not been on good terms with each other in recent times after South Korea, with help from the U.S.A deployed an anti-ballistic missile defence system, also called THAAD (Terminal High Altitude Area Defence).
The Anti-Ballistic Missile System installed by South Korea along its border in the north was, to defend itself from North Korea which has been threatening to fire its nuclear missiles. But China fears that the THAAD will make its own ballistic missile capabilities ineffective to an extent, and has in the past said that it 'upsets the regional security balance'.
So, it is very clear that China is upset with South Korea for deploying THAAD in the region, but is unable to anything about it directly. Is the recall of these cars by Chinese authorities a reaction towards the diplomatic differences between the two countries?
Hyundai and Kia are both South Korean companies, and both the companies have posted a drastic drop in sales in the Chinese market, while their sales continue to grow in the rest of the world. Other than the automotive angle, China has in recent months banned tourist groups from going to South Korea, and dozens of Lotte Retail stores shut down in China (Lotte is from South Korea)
It isn't official that China is in economic retaliation against South Korea, and is just speculation for now. However, the facts above all just point to the same direction.
DriveSpark Thinks!
The entire world is aware of the fact that North Korea has been threatening to wage nuclear war, and the one country at immediate risk is, South Korea. If South Korea intends to defend itself, there is no reason for China to be offended. However, it is to be kept in mind that China has been supporting North Korea economically for quite some time now.
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