Production at Hyundai Motor plants resumes

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Production at Hyundai Motor plants resumes

Hyundai Motor Group’s domestic factories started to reopen today with parts supplied from Korea, Southeast Asia and China.

Other Korean companies in electronics and batteries partially reopened Chinese factories on Monday, with the extended Lunar New Year holidays running out on Feb. 9.

Korea’s car industry was hit hard by the new coronavirus outbreak, and domestic manufacturers halted production last week due to a parts crunch tied to subcontractors in China. The weakest link in the supply chain was the wiring harness, which acts as the nervous system of vehicles, transferring power and electric signals among auto parts.

Due to the supply shortage, Hyundai Motor Group started closing down its domestic factories starting from Feb. 4. By yesterday, all its factories were closed. Hyundai Motor Group has three suppliers of wiring harnesses, all headquartered in Korea. But they all have production in China.

But suppliers restarted production facilities in China last week for test runs after receiving approval from their local governments. The first batch of last week’s production arrived in Korea yesterday afternoon.

“Some 34 from among 40 wiring harness plants run by Korean companies in China partially resumed production,” said Prime Minister Chung Sye-kyun, Monday. “Production made through Feb. 6 will arrive today.”

“[The government] will make sure that tax procedures are sped up once the parts arrive from China,” he added.

Hyundai Group resumed production today in two factories that produce its most popular models using wiring harnesses sourced from domestic and Southeast Asian factories. The plants are Hyundai Motor’s second Ulsan plant, which produces the company’s Palisade and Genesis GV80 SUVs, and Kia Motors’ Hwaseong factory in Gyeonggi.

Yesterday it announced that plants that manufacture sedans and SUVs will gradually open through Feb. 17, but the Jeonju plant in North Jeolla which produces buses and trucks won’t open until the end of this month.

“Theoretically, we can start production once the parts are here, but supplies will first have to be verified,” a spokesperson said.

“Verification is a procedure we do for every shipped component, but in this case we have to do it with extra attention and care. After all, these are supplies coming after days of halted operations,” the spokesman added.

Among other carmakers, Renault Samsung Motors will halt factories for four days starting today due to supply chain problems, while SsangYong Motor will resume production on Thursday after a nine-day break.

Electronics, displays and battery makers also restarted operations of Chinese plants on Monday but not all to full capacity. One issue is the number of available workers. Some workers are being quarantined, and some were not able to return from their homes after the Lunar New Year.

Samsung Electronics’ Suzhou plant for home electronics opened Monday. Its TV plant in Tianjin, however, delayed its relaunch by a week. At LG Electronics, seven of 10 factories in China started Monday.

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