이미지 확대Korea’s two auto giants Hyundai Motor and Kia Motors may have to cut back or even halt production due to disruption in its supply chain in China amid the outbreak of the deadly new cornoavirus.
Smaller automaker Ssangyong Motor has already decided a week-long shutdown from Feb. 4 as its Chinese car wiring supplier remains closed for an extended period.
To prevent the spread of the new coronavirus, the Chinese government extended the Lunar New Year holidays to Feb. 2, and local governments joined to order an additional extension until Feb. 9.
Korean carmakers are struggling to get a wiring harness from China as the component is essential to keep the vehicle in working order, while their inventory is running out, industry sources said on Monday.
The wiring structure varies depending on the vehicle’s model and trim, making it challenging to provide compatible wiring harnesses.
Hyundai already canceled overtime planned for a Palisade assembly line in Ulsan last weekend, and Kia cut output at its Hwaseong and Gwangju plants to downgrade a production speed.
The measure comes on the heels of supply disruption at Yura Corporation, Kyungshin and THN, top-tier Korean suppliers that provide wiring harnesses from China to Hyundai and Kia in Korea.
Industry watchers say some Hyundai and Kia models already started to run out of wiring harnesses, and many other models will face an inventory shortage this week, making it unavoidable to stop the entire assembly line.
Hyundai Motor President Ha Eon-tae Monday informed employees that it is inevitable that the company will be closed due to supply disruption in China, but the shutdown period and methods may vary by plant and line.
이미지 확대GM Korea already dropped an overtime plan last weekend for domestic lines. Renault Samsung said its plant has no supply chain problem right now, but it is carefully monitoring the situation.
If the situation is prolonged, Korean car part suppliers that moved production lines from Korea to China due to labor costs will face disruption, said Lee Hang-gu, senior researcher at Korea Institute for Industrial Economics & Trade, adding this crisis will force Korean manufacturers to consider countermeasures such as supply diversification.
By Park Yun-gu and Minu Kim
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
