An unofficial Chinese boycott of Korean businesses over the deployment of a Terminal High-Altitude Area Defense battery in Korea is taking its toll on Hyundai and Kia and their suppliers in China.

One Korean parts supplier has been running its factory at only 40 percent capacity since April. "We invested heavily to build a plant in Chongqing to supply parts to Hyundai's factory that is scheduled to open there later this year," an executive said. "At this rate, we will end up losing all the money we invested."

Hyundai and Kia released their combined sales in China for June on Monday, which plunged 63 percent from the same month last year. Hyundai sold 35,000 cars and Kia 17,000. Cumulative January to June sales were down 47 percent.

Some 510 Korean auto parts makers who followed Hyundai and Kia to set up production facilities in China are suffering. One industry insider said, "Most manufacturers are forced to operate at only 50 percent capacity, which has prompted their workers to leave."

Some 510 Korean auto parts makers who followed Hyundai and Kia to set up production facilities in China are suffering. One industry insider said, "Most manufacturers are forced to operate at only 50 percent capacity, which has prompted their workers to leave."