GV80·Palisade and Other Popular Models Critical to Securing Supply... Ulsan Plants 2 and 4 to Operate Full Overtime Next Month
[Asia Economy Reporter Kim Ji-hee] Hyundai Motor Company, which has been unable to operate its factories properly throughout this month due to the impact of the novel coronavirus infection (COVID-19), is determined to make a fresh start from next month. First, it plans to resume weekend overtime work mainly on production lines of popular models such as the Genesis GV80, making an all-out effort to secure supply volume.
According to the industry on the 27th, Hyundai Motor recently finalized its March production plan and decided to conduct weekend overtime work at domestic factories. Ulsan Plant 2 and Plant 4 will have four overtime workdays on the 7th, 14th, 21st, and 28th of next month. Although there is a possibility of changes depending on parts supply, the plan is for all other lines to also conduct at least one weekend overtime work session.
In particular, factories producing popular models with accumulated demand and volume models will speed up production. Currently, Ulsan Plant 2 manufactures the Genesis GV80, Hyundai Palisade, Santa Fe, Tucson, and others. Ulsan Plant 4 also produces Palisade on some lines.
The model that Hyundai aims to significantly increase supply volume through full overtime work next month is undoubtedly the Genesis GV80. At Ulsan Plant 2, 4,500 units of the GV80 for domestic sales are scheduled to be mass-produced in March alone. Although this is a reduced figure compared to the previous plan to produce 4,800 GV80 units in March, considering that the supply of Chinese-made wiring harnesses has not yet fully normalized, it is still a considerable amount. As of the 25th, the waiting demand for the GV80 is close to 18,000 units, with customers reportedly having to wait about 10 months for delivery.
Hyundai Motor has faced significant production disruptions this month due to parts supply issues. Amid the ongoing shortage of wiring harnesses that surfaced earlier this month, a first-tier supplier shut down its workplace this week due to the COVID-19 impact, causing other parts supplies to be unstable as well. Factories had to close for about ten days each, and even during periods when factories remained open, some lines operated with conveyor belts more than 70% empty.
Currently, Hyundai's domestic factories still face unstable parts supply, but it is reported that the number of idle lines has significantly decreased compared to before.
Accordingly, Hyundai appears to be making an all-out effort to secure supply volume through March overtime work. The strategy seems to be to quickly normalize production starting with vehicles that have long customer waiting periods. Earlier, Hyundai Motor President Gong Young-woon stated after the 'COVID-19 Response Business Meeting' held at the Seoul Chamber of Commerce and Industry on the 7th, "We will operate factories normally starting with models that have high demand."
An industry insider said, "The automobile market is a consumer-centered business structure rather than supplier-centered, so customer attrition is the biggest risk," adding, "Hyundai Motor also cannot keep customers waiting indefinitely in a situation where it is impossible to predict how long the impact of the COVID-19 crisis will last."
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