(Yicai) Aug. 9 -- Nine dealers in China’s central Hunan province have temporarily stopped taking deliveries of vehicles from Beijing Hyundai Motor, citing high inventories, operating difficulties, and severe losses for the decision.

The dealers called on Beijing Hyundai to immediately address inventory issues in Hunan and fulfill all previous commitments and reward policies, according to the open letter they sent to the joint venture of Hyundai Motor and BAIC Motor yesterday. The carmaker said it is looking into the matter.

The nine constitute the bulk of Beijing Hyundai's dealers in the southern province, one of them told Yicai. He noted that while the number of vehicles in Beijing Hyundai's inventory is not large, a sharp decline in sales has led to a high inventory ratio.

Set up in 2002, Beijing Hyundai was once one of China's most successful auto JVs. But sales shrank to 257,000 units last year from a peak of 1.1 million in 2014, mainly because of the emergence of China’s own auto brands. In the first half of this year, Beijing Hyundai sold only 100,000 cars.

Beijing Hyundai scaled back production in the face of falling sales. The firm sold its factory in Beijing's Shunyi district to Chinese new energy vehicle startup Li Auto in 2021, and it announced this January that it had sold another in Chongqing to a local state-owned investment group.

Hyundai will close one more plant and sell two others in China, President and Chief Executive Officer Jaehoon Chang said in June last year. But he did not disclose which other plant the Seoul-based auto giant would dispose of.

Besides cutting capacity, Hyundai will also shrink its China product lineup to eight models from 13 and focus on sports utility vehicles and its luxury brand Genesis, Chang added.

Beijing Hyundai targets sales of 500,000 units next year: 300,000 hybrids and 200,000 battery electric vehicles.

Editor: Futura Costaglione