S Korea's auto industry faces challenges in H1 as COVID-19 affects operations

Singapore — South Korea's auto industry faces challenges for its H1 operations as the COVID-19 pandemic affects both its domestic and global operations.

The country's leading carmaker, Hyundai Motor, said Monday it has suspended operations at its plant in Chennai, India, after the Indian government put the country on lockdown the same day to stem the spread of the coronavirus.

The Chennai plant, which has a production capacity of 650,000 units/year, will remain shut until the end of March, in line with the government's decision. On Sunday, India imposed a 14-hour de facto shutdown.

Hyundai's subsidiary, Kia Motors, is expected to shut its 300,000 units/year plant in Anandapur.

The decision comes after Hyundai Motor Manufacturing Alabama said it will extend a suspension on production from its Montgomery, Alabama plant from March 23 until March 31.

Hyundai Motor Manufacturing Alabama had initially suspended operations on March 18, to begin disinfecting the plant after a COVID-19 case was confirmed at the 400,000 units/year plant.

"This suspension will reduce production by approximately 10,000 vehicles during these seven days," the US unit said.

The suspension will affect South Korea's production for Q1, the country posted a 26.4% year-on-year fall in vehicle production to 189,235 units.

"The decrease was attributable mainly to the shortage of auto parts from China and the temporary shutdown of production lines due to the coronavirus outbreak," the Ministry of Trade, Industry and Energy said.

With February data summed up, South Korea's vehicle production for the first two months of 2020 totaled 440,810 units, a 27.9% plunge against the corresponding period of 2019.

A slump in automobile production is expected to translate into a steep drop in demand for steel plates, market sources said.