It looks like the novel Coronavirus continues to disrupt global businesses and events. Aside from the cancellation of Formula E in China, as well as the shift in production of a Honda supplier from Wuhan to the Philippines, Hyundai’s factories in South Korea were forced to stop production due to parts shortage.
Why? The Korean automaker actually sources a lot of its parts from China. With the Coronavirus outbreak still affecting the People’s Republic, Hyundai’s parts supply has been affected as well. With it, most of Hyundai’s factories in Korea will stop production starting on February 7. The automaker is looking to restart manufacturing on several production lines, however, on either February 11 or February 12.
Prior to Hyundai’s plan to temporarily shut down production, the company has already halted production of the Palisade last weekend due to a shortage of wiring harnesses that they also source from China. As both Hyundai and Kia do not keep stockpiles of the part, they are now in a bit of a bind.
“Hyundai and Kia may be more affected as they tend to import more parts from China than other global automakers. South Korean parts makers followed and built their own facilities along with Hyundai,” said Lee Hang-koo, senior researcher at Korea Institute for Industrial Economics & Trade.
Currently, two of the affected parts suppliers, Kyungshin and Yura Corporation, stated that they are now boosting production in Southeast Asia and in Korea in order to compensate for the disruption at their factory in China. However, the two suppliers are looking to restart production in China come February 9.
With Hyundai Asia Resources Inc. (HARI), the official distributor of Hyundai in the Philippines, sourcing most of its models (apart from the China-made Reina) from Korea, does this mean there will be supply problems locally? There's no official word yet from HARI if the local supply has been affected. However, we'll keep you all posted once the company officially sends word regarding this matter.