[Exclusive] Hyundai Motor to Halt Tucson Line Again

Tucson and Nexo Production Ulsan 5th Plant Line 2 to Close Next Week

Hyundai Motor Ulsan Plant (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Hyundai Motor Company's Ulsan Plant 5 will halt operations once again. The production volume has decreased due to export routes being blocked by the spread of the novel coronavirus infection (COVID-19).

According to Hyundai Motor on the 8th, Line 2 of Ulsan Plant 5, where the Tucson and Nexo are produced, will temporarily shut down next week. This line will be closed from the 13th to the 17th. No holiday overtime work will be conducted during this period. Except for the National Assembly election day, the actual holidays amount to four days. After the shutdown, production will operate with one production line and four buffer lines until the 29th.

So far, Line 2 of Ulsan Plant 5, along with Plant 1, has faced the greatest difficulties due to a shortage of volume. Since Nexo, a hydrogen vehicle, and Tucson are produced at Plant 5 Line 2, the production volume of Tucson is much higher. Especially, the Tucson produced here has a high export ratio overseas, making it a direct victim of the COVID-19 crisis. In the case of Plant 1, where Kona and Veloster are produced, most of the volume is exported to Europe, so a shutdown has not yet been decided, but weekend overtime work is not being conducted.

Earlier in February, Hyundai Motor temporarily halted operations not only at Ulsan but also at Asan and Jeonju plants due to a shortage of Chinese-made wiring harnesses. At that time, Ulsan Plant 5 Line 2 also experienced a shutdown lasting more than ten days, causing production disruptions. In March, shutdowns were avoided through production volume adjustments, but this month, as exports to Europe, the United States, and other regions sharply declined, a shutdown could not be avoided.

Accordingly, Hyundai Motor is reportedly considering finishing the production of the Tucson made at Plant 5 and introducing the 4th generation new Tucson, originally scheduled for release this summer, earlier than planned. The 4th generation Tucson is a complete redesign (full change) model of the 3rd generation Tucson, which was launched in 2015. Since Tucson is a traditional volume model, recording the highest sales among SUVs within the brand in the U.S. market, internal expectations at Hyundai Motor are quite high.

Starting with Plant 5, Hyundai Motor plans to strengthen the flexible operation system of domestic plants in response to the COVID-19 crisis. Since the global spread of COVID-19 continues not only in Europe and the United States but also in emerging countries, export disruptions are inevitable for the time being. Hyundai Motor plans to adjust production volumes by utilizing buffer line operations in the future.