AUTOSHOW-Hyundai China JV facing "severe challenges" given complex political, economic environment -chairman

SHANGHAI, April 19 (Reuters) - Hyundai's China joint venture

is facing "severe challenge" due to a complex political and

economic environment and tough local competition, the firm's

chairman said on Wednesday, amid a political stand-off between

China and South Korea.

Xu Heyi, chairman of Beijing Hyundai, a joint venture

between South Korea's Hyundai Motor Co and BAIC

Motor Corp Ltd, was speaking at the Shanghai autoshow.

Hyundai and its affiliate Kia Motors Corp saw

combined China sales slump 52 percent in March from a year

earlier, hit by anti-Korean sentiment over the planned

deployment of a U.S. missile defence system outside Seoul.

"At the moment given the complicated political, economic and

competitive market environment, Beijing Hyundai faces what we

can describe as severe market challenges," said Xu, adding the

firm would not slow its pace of innovation in the market.

(Reporting by Brenda Goh; Writing by Adam Jourdan)