"Taking a Breather"... Auto Industry Still Feels Aftershocks of COVID-19

[Asia Economy Reporter Kiho Sung] The domestic automobile industry, which had suspended operations due to the impact of the novel coronavirus infection (COVID-19), is gradually resuming production. However, concerns are expected to persist for the time being as the situation in China has not yet fully improved.

According to the automobile industry on the 16th, Hyundai Motor Company is normalizing operations at its major plants with the resumption of wiring harness supply, which had caused supply disruptions. Currently, all plants except for Ulsan Plant 5 Line 1, which produces the Genesis sedan lineup (G70, G80, G90), and the Jeonju plant, which manufactures commercial vehicles such as buses and trucks, are operating normally. Ulsan Plant 5 Line 1 is expected to be fully operational by the 17th, and the Jeonju plant by around the 24th.

While Hyundai Motor has taken a breather, Kia Motors is still showing signs of instability. Kia announced on the 14th that it would extend the shutdown of its Sohari plant until the 18th. The Sohari plant produces the Carnival, Stinger, and K9 models. Previously, Kia had suspended operations from the 10th to the 14th due to wiring harness supply disruptions.

Partial production is ongoing at other plants. Gwangju Plants 1 and 3 (large bus lines) resumed production on the 12th, and Gwangju Plant 2 (producing the Sportage and Soul) resumed production from the 14th. Hwaseong plant has returned to normal operations as scheduled from the 11th.

Among the mid-sized three companies, there appears to be some relief from the impact of parts supply interruptions. Renault Samsung Motors plans to resume production from the 17th. SsangYong Motor has been producing vehicles again since the 13th. On the other hand, Korea GM is scheduled to halt operations at Bupyeong Plant 1 from the 17th to the 18th.

Although the COVID-19 situation is showing signs of calming down for now, the problem lies in the unfavorable circumstances in China, which could lead to further disruptions in parts supply. China currently has a cumulative total of approximately 68,500 confirmed COVID-19 cases and 1,665 deaths, showing no signs of abating.

Due to the nature of the automobile industry, production can be increased by adjusting operating volumes if there is demand. However, if additional parts supply disruptions occur in China, the February indicators are expected to suffer a critical blow. An industry insider said, "If parts supply is properly maintained from now on, production volume can be increased to meet demand," but added, "However, since the situation in China could worsen further, it is difficult to make a forecast at this time."