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Hyundai-Kia China has import permit revoked

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Shanghai, October 14, 2008: ( Industry sources said that the import permit of Hyundai-Kia Auto (China) has been suspended because of complaints from dealers, said Beijing Morning Post today. This is the second suspension case of a foreign auto importer's permit this year after Lexus's import license was revoked in June.

Since January 2008, China Automobile Dealers Association (CADA) have received complaints from Hyundai-Kia dealers about the sales bundling and overstocking enforced by Kia China. In these months the dealers are facing growing pressures of the dwindling market and short funding. Now China's commerce ministry has temporarily revoked the import permit of Hyundai-Kia (China).

A CDCA official said that the ministry has required Hyundai and Kia to solve the complaints from their dealers quickly and properly before their import license is renewed.

Currently Hyundai and Kia have an inventory of about 5,500 vehicles in Chinese ports, excluding the dealership stockpliles and their imports on the way in the coming three months. Hyundai-Kia (China) aims to sell 55,000 imported vehicles in 2008, but it had only sold about 30,000 units by the end of September.

Industry experts said that if the Korean auto company sticks to this sales goal in the currently sluggish Chinese market, more of their imports will pile up in the dealerships. As a result, the dealers who cannot fulfill the sales targets will face huge risks and some will have to close down.

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