Hyundai, Kia close factories on parts shortage

By Baek Byung-yeul

The spread of the novel coronavirus is dealing blows to Korean automakers as Hyundai Motor and Kia Motors have suspended operations of their assembly lines in Korea due to shortages of auto parts sourced from China where the outbreak originated.

In a regulatory filing to the Financial Supervisory Service, Friday, Hyundai posted it has decided to temporarily halt the operation of its Asan and Ulsan factories starting Feb. 7 and its Jeonju factory from Feb. 10. Hyundai's sister company Kia Motors will also suspend its assembly lines on Feb. 10.

The move came after China has extended its mandatory factory shutdowns to stop the spread of the deadly virus, which is disrupting the global supply chain.

Forecasting the influence of factory shutdown, Hyundai said it will suffer output losses. A Hyundai official said it has not decided as to when it will restart its assembly lines.

Hyundai has seven assembly lines in operation here ― five in Ulsan, one in Asan and one in Jeonju and 10 overseas plants. Kia has eight domestic plants in Gwnagmyeong, Hwaseong and Gwangju and seven overseas factories.

Local SUV maker SsangYong Motor has also been heavily affected by the outbreak of the virus. The company has stopped operations of its factory in Pyeongtaek, 70 kilometers south of Seoul, until Feb. 12 because it has failed to procure enough auto parts.

GM Korea isn't experiencing any immediate impact on its production, but continues to monitor the on-going situation closely, while Renault Samsung is considering suspending operations at its plant in Busan for several days next week.

The government is bolstering its efforts to help local carmakers procure auto parts. It is also seeking ways to “partially” restart operations of China-based parts-making factories through a negotiation with local Chinese governments.

During a meeting seeking countermeasures against the novel coronavirus, Finance Minister Hong Nam-ki said the government will actively support local carmakers to help them normalize their operations as soon as possible.

“The government will bolster its negotiation effort with the local Chinese governments to restart the auto parts factories in China,” Hong said during a meeting in Seoul. He added the government will also simplify the import procedure so that automakers can quickly apply those parts imported from China to their vehicles.

The minister added it will allow local auto parts makers to extend the working hours of their employees and offer aid in human resources to increase the volume of locally-manufactured parts.