Coronavirus forces Hyundai to halt production in South Korea

South Korean automaker Hyundai will gradually halt production in South Korea, where it assembles 40% of its vehicles, due to the coronavirus epidemic in China that is disrupting its supply chain.

Many manufacturers such as Ford, Nissan, Tesla and PSA have already suspended production in certain Chinese factories, on the instruction of local authorities, but Hyundai is the first manufacturer affected outside of China.

The schedule of interruptions will vary by site, said a Hyundai spokesperson.

According to a union official, most of Hyundai’s seven plants in South Korea will be completely paralyzed from Friday February 7, but some production lines may restart on February 11 or 12.

The group has already interrupted the production of its popular SUV Palisade last weekend, due to the lack of sufficient parts from China.

Hyundai and its subsidiary Kia Motors, which together make up the fifth largest manufacturer in the world, only store a small part of their parts, which are mostly made in China, explained Lee Hang-koo, researcher at the Institute Korean industrial economy.

This dependence of Hyundai on China, more accentuated according to him than for other car manufacturers, is explained by the creation a few years ago of a large production base in China by the South Korean group. Hyundai’s subcontractors then moved to the country and built their own factories.

Last year, South Korea imported 1.56 billion US dollars worth of auto parts from China, customs statistics show.

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