SEOUL Hyundai Motor Co (005380.KS) and Kia Motors Corp (000270.KS) expect it will be difficult to sell 1 million vehicles in China this year due to political tension - a figure that is around half their initial target, the Aju Business Daily quoted an executive as saying.
The automakers' combined China sales slumped 52 percent in March from a year earlier, hit by anti-Korean sentiment over the planned deployment of a U.S. missile defense system outside Seoul.
"Since there is no one who wants to buy (Hyundai cars), launching a new model or a sales promotion does not have much meaning," Hsueh Yung-hsing, who oversees the China businesses of the two automakers, was quoted as saying.
In contrast, rivals Toyota Motor Corp (7203.T), Honda Motor Co Ltd (7267.T) and General Motors (GM.N) reported increases in China sales in March.
Hsueh added that the longer-term outlook could be bleak, noting how Japan's 2012 territorial row with China hit sales of Japanese carmakers hard for some time.
"It took three years for Japan to recover from a diplomatic dispute with China. Our dealers will all leave if cars don't sell well and it will take at least two years to regain market (share)," the newspaper quoted him as saying.
A Hyundai spokesman declined to comment.
The two automakers sharply cut vehicle production in China in March, people familiar with the matter have said.
China, the world's biggest auto market, accounted for over a quarter of the pair's 2016 overseas sales or 1.78 million vehicles.
(Reporting by Hyunjoo Jin; Editing by Edwina Gibbs)