Hyundai Motor and GM Korea affected by China lockdowns

Industry

Published: 25 Apr. 2022, 18:56 Updated: 25 Apr. 2022, 20:05

Hyundai Motor and GM Korea affected by China lockdowns

Hyundai Motor Caspers are parked at a lot at the Gwangju Global Motors automotive plant in Gwangju on April 19. Gwangju Global Motors is an assembler for the Casper and produces 200 a day on average. [YONHAP]

Korean automakers have slowed some production as parts from China are delayed due to lockdowns in the country.

Hyundai Motor has faced a shortage of airbag control units (ACUs) — a device that detects accidents and triggers the airbag — normally imported from China.

Hyundai Motor "couldn't procure enough ACUs since April 18, and had to leave the assembly lines for Genesis GV60s, 70s and 80s partially idle at its Ulsan plant," said a source from an auto manufacturer.

Approximately 1,200 cars couldn't be manufactured over the past week, according to the source. Hyundai Motor managed to buy ACUs from other countries, including Canada, and will bring the production back to normal from Monday.

Gwangju Global Motors, which makes the Hyundai Casper, halted production from April 18 to 21 due to the ACU shortage. GM Korea, the Korean unit of General Motors, adjusted production at one of its Bupyeong plants as the company's Chinese suppliers failed to meet orders for the brake system parts in time.

Renault Korea Motors and SsangYong Motor didn't take direct hits from parts shortages yet, but the carmakers are keeping a close eye on inventory and suppliers.

China has been imposing a stringent zero-Covid policy, shutting down Shanghai since March 28. Other cities affected by the policy include Kunshan, Shenzhen, Suzhou, and Xi'an.

China's SAIC Motors, as well as Tesla and Volkswagen, suspended operations at local factories due to the lockdowns. The shutdowns resulted in a delay in the manufacturing Teslas.

Hyundai Motor and Kia haven't been directly affected by the Shanghai lockdown, as neither manufactures there, but as they do have factories and business partners in other regions of the country, the carmakers could get hit at some point.

In March, Hyundai and Kia were affected by the lockdown in Shandong, which came before the Shanghai closure, and were unable to source wiring-harnesses. The companies had to cut production for two to four weeks in March.

China plays a vital role in the global automotive supply chain, as most carmakers and thousands of auto-part suppliers are operating in the country. China's lockdowns have had a significant effect on car production worldwide, as the wiring-harness shortage in February 2020 led to production bottlenecks.

"Production fell in the first quarter due to the auto chip shortage, and we are running out of other parts from China," said a spokesperson for GM Korea.

GM Korea produced 60,408 vehicles during the first quarter, down 30 percent from the same period last year.

Hyundai Motor produced about 370,000 units, a 10 percent decline from last year, and Kia's production decreased by 7 percent to 330,000 units in the January-to-March period. Though Renault Korea Motors and Ssangyong Motor reported increases in production compared to 2021, the figures are still falling short of the pre-pandemic levels.

Supply disruptions may also be affecting prices.

Tesla increased Model 3 prices by 10 million won ($8,000) over the past two months, and Hyundai's latest models are more expensive than previous models.

Waiting periods are lengthening. Kia Sportage and Sorento buyers were waiting 14 months for delivery earlier this year. The wait is now 18 months.

BY BAEK MIN-JEONG, SHIN HA-NEE [shin.hanee@joongang.co.kr]