S.Korean cars recalled in China as row hits sales

Chinese authorities have announced the recall of more than 44,000 South Korean-branded vehicles over "potential safety risks", in another setback for the South's automakers already hit by a diplomatic dispute. Authorities on June 23 announced a recall of 43,764 Hyundai Santa Fe models over a defect that can cause the engine to fail. The General Administration of Quality Supervision, Inspection and Quarantine said Wednesday that 601 Kia Borrego autos would also be recalled, over loose wheel nuts. And 40 Kia Sorento vehicles would also be called back over a defective engine pipe that can leak and catch fire. Hyundai's bottom line has already been hit hard by a row between Beijing and Seoul over the deployment of a US missile shield on the Korean peninsula, which has sparked Chinese economic retaliation. Both Hyundai and its affiliate Kia Motors have posted dramatic falls in sales in China. Hyundai's first-quarter net profit dropped 21 percent to 1.46 trillion won ($1.3 billion), its 13th consecutive quarter of profit downturn. In recent months China banned tour groups to South Korea and dozens of Lotte retail stores in the country were shut down. The defence system is intended to guard against missile threats from nuclear-armed North Korea, but South Korea's dovish new President Moon Jae-In has suspended further deployment of the shield. China fears the Terminal High-Altitude Area Defense system will weaken its own ballistic missile capabilities and says THAAD upsets the regional security balance.