Hyundai Motor to suspend domestic production
O Lines to be idled from Feb 7 as supply of parts from China is disrupted by coronavirus outbreak
SEOUL: Hyundai Motor said yesterday it will suspend production in South Korea due to the coronavirus outbreak disrupting parts supply, becoming the first major automaker to do so outside of China.
The flu-like virus has killed more than 400 people and its economic impact has spread beyond mainland China.
In China, global automakers have already extended factory closures in line with government guidelines including Hyundai, Tesla, Ford, PSA Peugeot Citroen, Nissan and Honda Motor.
“Hyundai and Kia may be more affected as they tend to import more parts from China than other global automakers,” said Lee Hang-koo, senior researcher at the Korea Institute for Industrial Economics & Trade.
Hyundai has built up a huge production capacity in China over the past two decades.
“South Korean parts makers followed and built their own facilities along with Hyundai,” Lee said.
South Korea imported US$1.56 billion (RM6.4 billion) worth of auto parts from China in 2019, up from US$1.47 billion in 2018, trade data show.
Most of Hyundai’s South Korean factories will be fully idled from Feb 7, while some production lines are expected to restart on Feb 11 or Feb 12, a union official said, declining to be identified given the sensitivity of the matter.
The move follows a shortage of wiring harnesses which Hyundai sources mainly in China, industry officials said.
Two of the affected suppliers, Kyungshin and Yura Corp, said they were trying to boost production at their factories in South Korea and Southeast Asia to compensate for the disrupted supply from China. They both also plan to resume production at their Chinese factories after Feb 9.
“We are in an emergency,” a Kyungshin official told Reuters.
Hyundai has seven factories in
South Korea, catering to the local market and the United States, Europe, Middle East and other markets. Hyundai’s production in South Korea accounts for about 40% of its global output.
Hyundai operates 13 plants worldwide, including the seven in South Korea, and last year sold a total of 4.4 million vehicles. Its South Korean production amounted to around 1.8 million vehicles, or about 35,000 a week. – Agencies