* Hyundai-Kia's China sales dropped 52 pct in March
* Anti-Korean sentiment stems from missile dispute (Adds details, context)
SHANGHAI, April 19 (Reuters) - The China joint venture of South Korea's Hyundai Motor Co is facing "severe challenges" due to a complex political, economic and competitive environment, its chairman said on Wednesday, amid a political stand-off between Beijing and Seoul.
The carmaker has seen its sales hit in the country and has sharply cut production amid anti-Korean sentiment over the planned deployment of a U.S. missile defence system outside Seoul and rising competition from Chinese brands.
"At the moment given the complicated political, economic and competitive market environment, Beijing Hyundai faces what we can describe as severe market challenges," Xu Heyi, chairman of Beijing Hyundai Motor Co, said at an event at the Shanghai auto show.
Beijing Hyundai is a joint venture between Hyundai and BAIC Motor Corp Ltd.
Hyundai and affiliate Kia Motors Corp saw combined China sales slump 52 percent in March from the same month a year earlier. China, the world's biggest auto market, accounted for over a quarter of the pair's 2016 overseas sales.
In contrast, rivals Toyota Motor Corp, Honda Motor Co Ltd and General Motors Co reported increases in China sales last month. (Reporting by Brenda Goh; Writing by Adam Jourdan; Editing by Christopher Cushing)