Hyundai Motor suspends output as coronavirus disrupts supply chain
Most of Hyundai’s South Korean factories will be fully idled from Feb. 7 to Feb. 10 or Feb. 11, a union official said, declining to be identified given the sensitivity of the matter.The idling, which had been discussed by Hyundai management since Monday, was due to a shortage of auto parts called wiring harnesses, auto industry officials told Reuters earlier.
The automaker and its affiliate Kia Motors do not keep a large inventory of the parts, a majority of which are manufactured in China, said Lee Hang-koo, senior researcher at Korea Institute for Industrial Economics & Trade. “Hyundai and Kia may be more affected as they tend to import more parts from China than other global automakers,” Lee said.
He said Hyundai’s reliance on China has grown sharply as it built a huge production capacity in the country several years ago when its business was booming there.Hyundai Motor has seven factories in South Korea, which caters not only to the domestic market but also U.S., Europe, Middle East and other countries. Hyundai’s domestic production accounts for about 40% of its global output.
South Korea imported $1.56 billion worth of auto parts from China in 2019, versus $1.47 billion in 2018, trade data shows.Our Standards:
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