Hyundai Motor sees China sales slowdown

The anticipated slowdown in Hyundai's business in China during the second half of this year reflects the country's general economic slowdown, according to a Hyundai marketing executive who spoke on condition of anonymity.

The Hyundai executive added that a dearth of new or significantly redesigned models in the second half for both Hyundai and Kia brands, as well as the lack of manufacturing capacity in China would also impact growth.

Even after starting production at a third plant last year, Hyundai cannot build cars fast enough.

"We were OK in the first half but anticipate capacity constraints in the second half, even as we try to squeeze more out of our existing facilities," the Hyundai executive told Reuters.

Nissan bounce

Nissan said there were "positive signs of improving sales volume in China" after the Japanese carmaker was particularly hard hit by a diplomatic row between Tokyo and Beijing last September.

China was Nissan's biggest market for the last four years and accounted for about a quarter of its sales volume last year, making Nissan the most reliant on that country among Japan's carmakers. Japan's No 2 carmaker makes vehicles in China in partnership with Dongfeng Automobile Group Co Ltd.

Nissan's China sales slid 15 percent from a year earlier, with its market share slipping 2 percentage points to 5.5 percent. Because of a difference in the Chinese and Japanese financial years, Nissan's January-March sales in China are reflected in its April-June results.

But the drop in its China sales narrowed markedly in the latest quarter. Sales fell 1 percent year-on-year in the April-June period to 308,000 vehicles, giving it a market share of 6.2 percent, down 0.7 percentage point.

Nissan Corporate Vice President Joji Tagawa said he expects its annual market share in China to rise to 6.5 percent. That compares with a 7.5 percent market share in January-June, 2012.

Nissan has so far not seen any impact from monetary tightening in China, he said, but he declined to comment on macroeconomic outlook.