On July 20, Rong Zhen, a Hyundai Motor China dealer, told Reuters that Hyundai Motor has removed all models from the product lineup provided to Chinese import dealers, leaving only one model – the Veloster – available for sale, while the Genesis luxury sedan and the Santa Fe require pre-ordering.
Hyundai stated that import dealers can apply to become dealers for models produced by Beijing Hyundai, however, Rong Zhen pointed out that no import dealer has successfully completed the transformation yet.
Rong Zhen said in an interview, "Dealers exist to sell cars. If the manufacturer does not provide models, we cannot continue operations, and we can only exit the dealer network." Hyundai Motor has nearly 40 import dealers in China, among which 30 dealers are demanding compensation for exiting the network.
According to the joint letter issued by Hyundai China dealers, Hyundai Motor transferred the production of the new Santa Fe, which accounts for 80% of the brand's import sales volume, to Beijing Hyundai, but did not launch other core models afterwards, resulting in serious losses for dealers. In addition, since 2014 up to now, nearly 50% of Hyundai China import dealers have been persuaded to exit the network; since 2016, Hyundai has stopped accepting orders or failed to provide models meeting China's National V emission standard, leaving dealers with no cars to sell. Therefore, import Hyundai dealers in China are demanding the automaker provide compensation for exiting the network.
When facing similar situations, dealers of other automakers also seek the car companies to share the losses. In early 2015, BMW Group agreed to pay 820 million US dollars in compensation to cash-strapped dealers.