It seems that businesses have tried to delay the decision to relocate their production for as long as possible to avoid giving the Chinese government a bad impression, but now they can’t stand it anymore.
A series of large Korean companies including Samsung Electronics, Hyundai Motor, Kia Motors and LG Electronics are shifting production out of China in an effort to reduce their over-reliance on China, leaving them vulnerable to competition. local escalation, geopolitical tensions as well as many other economic factors. These factors often have the greatest impact on large companies, according to the Nikkei newspaper.
A source from a Japanese company that has a lot of business with Korean businesses said: “It seems that businesses try to delay the decision to relocate their production for as long as possible to avoid creating for The Chinese government has a bad impression, but now they can’t stand it anymore. “
Samsung has started this trend. As Samsung smartphone sales in China have been steadily decreasing in recent years, Samsung’s market share has dropped to less than 1% in 2018, it is assumed that Samsung moved production out of China. It will only be a matter of time.
Samsung has tried to do everything it can to maintain manufacturing operations in China because the closure of the factory will mean that there will be pressure from many sides from a government that always wants to ensure jobs for the people.
But in the end, Samsung was unable to continue, and at the end of last year decided to halt production at its factory in China.
The move from Samsung inevitably led to many other large Korean companies making similar decisions. A Korean company employee said: “When Samsung has accepted to lead, the psychological burden on us also lessens.”
In May 2019, Hyundai Motor suspended production at its factory in Beijing with a capacity of 300,000 cars a year. The Kia Alliance will also stop production at its factory in Jiangsu Province, China later this month.
LG Electronics recently moved all of its production to the US market in Zhejiang Province, China and returned to Korea.
At the same time, Samsung is offering a voluntary retirement package for factory workers in Guangdong province.
The fact that Korean companies have too many activities in China is not without many people from before. But the fact that businesses that used to do good business in China used to hide these concerns.
* Source: BizLive