Hyundai Motor has temporarily decided to suspend production at a Chinese plant starting from next week, South Korean online news website ChosunBiz reported on Sunday, in what appears to be the latest fallout of the ongoing THAAD fiasco between Beijing and Seoul.

According to ChosunBiz, Hyundai Motor's China joint venture informed local suppliers that it will halt the production work at Cangzhou in Hebei Province from March 24 to April 1 for maintenance purposes.

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But many analysts see political reason behind Hyundai's decision, claiming that temporary suspension is due to flattening sales of South Korean products amid the THAAD tension. Interestingly, the call for temporary shutdown has come within six months the factory began its operation.

A Hyundai spokesperson declined to offer any comments on the report. Meanwhile, the report has not been received too well by the markets as Hyundai shares were trading 3 percent down on early Monday morning. But the stock recovered later to trade down by 1.5 percent.

It has been trouble times for South Korean companies in China ever since the deck got cleared for instalment of THAAD or U.S. anti missile system near the North Korean border. The companies have been subjected to stringent supervision by Chinese regulators and have been even asked to scale down their operations.

The one South Korean company that is facing the most heat is Lotte Group, since it agreed to lease one of its real estate lands to the government for instalment of the THAAD missile. Earlier this month, dozens of Lotte Mart - a retail chain operated by the company - in China were asked to shut down.

Following the action, the South Korean government filed a complaint in World Trade Organization (WTO) against China last week. In the complaint, Seoul termed China's actions against its companies as inappropriate and violation of their trade agreements.

China vehemently opposes the THAAD instalment owing to security concerns, which have never been take seriously by Seoul and Washington, who claim such a move necessary to counter any possible attack by North Korea.

TagsHyundai, Hyundai China, china, THAAD Missile