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S Korea's Hyundai Motor to stop production as virus curtails auto parts supply

  • Author
  • Clement Choo
  • Editor
  • Barbara Lorenzo Caluag
  • Commodity
  • Metals

South Korea's Hyundai Motor and Kia Motors will suspend car production indefinitely at all its local plants, the company said Friday, due to a lack of auto parts from its China-based suppliers.

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The shortage resulted from a prolonged shutdown of Chinese plants due to the coronavirus outbreak, it said.

Hyundai Motor operates seven plants in South Korea -- five in Ulsan, and one each in Asan and Jeonju. The Ulsan and Asan plants will suspend production Friday while Jeonju will stop production on Monday.

On the other hand, Kia Motors plans to suspend production at its eight local plants on Monday -- three each in both Hwaseong and Gwangju, and two in Gwangmyeong.

Hyundai Motor and its sister company, Kia Motors, had cut production last week after China-based South Korean suppliers stopped production since January 24 at the start of the Lunar New Year holidays.

The Chinese government told manufacturers to stop operations until February 9 to keep the virus from spreading farther.

"The expected date of operation resumption is depending on the supply of components," Hyundai Motor said.

It is the first time that Hyundai Motor has shut its plants since 1997 during the Asian financial crisis.

To offset the shortfall, Hyundai Motor said it will increase supplies from domestic and Southeast Asian suppliers.

In 2019, Hyundai Motor produced 1.79 million vehicles while Kia Motors made 1.45 million vehicles, up 2.2% and down 1.3%, respectively, from 2018.

Other local carmakers, such as GM Korea, SsangYong Motor and Renault Samsung Motors Corp., have either suspended or are considering cutting production.

SsangYong Motor suspended production at its Pyeongtaek plant from February 4 to February 12, citing the supply shortage.