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| Hyundai in Court over Alleged Fraud |
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South Korean carmaker Hyundai Motor Co's joint venture went to court yesterday in Beijing over an allegation of price fraud by 100 owners of its Accent subcompact car. According to the lawsuit filed in August at the Beijing Shunyi District People's Court, the owners claimed Hyundai's venture with Beijing Automotive Industry Corp, Beijing Hyundai, cheated them by cutting the prices of its Accent models in July. They are demanding 8,000 yuan (US$1,012) each in compensation and legal fees as well as a public apology from the firm, according to the plaintiffs' attorney Ding Runqiang. Beijing Hyundai launched three models of the 1.4-litre Accent on March 16, selling for 79,800 yuan (US$10,101), 87,800 yuan (US$11,113) and 102,800 yuan (US$13,012). On the day, the firm's president Noh Jae-man said in an interview that the prices of the Accent would not change "for at least two-and-a-half years," according to Sohu.com.cn, a popular Chinese Internet portal. But Beijing Hyundai slashed the prices of its two most expensive Accent models by 8,000 yuan (US$1,012) on July 7, less than four months after promising there would be no mark-downs. Meanwhile, the firm sold almost 10,000 Accent cars, according to Ding, from the Beijing Jiayou Law Firm. "We would not have chosen the Accent cars if Beijing Hyundai had not made the promise. It is irresponsible to customers," said Duanmu Zhanjun, an Accent owner from Zhengzhou, Henan Province. Beijing Hyundai yesterday denied the price fraud allegation, contending that Sohu.com.cn misinterpreted its president's remarks. "The case demonstrates that prices in China's car market are changing so fast that both manufacturers and customers cannot keep up with the pace," said Yale Zhang, director of emerging-markets vehicle forecasts for auto consultancy CSM Asia in Shanghai. Car prices in China have been declining in recent years and will continue on the downward trend as a result of mounting competition. Beijing Hyundai's sales grew by 23 percent year-on-year to 210,964 vehicles in the first three quarters of the year, including 26,229 Accent cars, according to market data. The firm announced at the beginning of the year that it aimed to sell 300,000 vehicles for the full year. It also makes the Elantra compact sedan, Sonata NF mid-sized sedan and Tucson sport utility vehicle. Sales of China-made cars increased by a quarter to 5.17 million units from January to September this year, including more than 3 million passenger cars. (China Daily October 20, 2006) |
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