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Posted on : Tuesday 19th May 2020 01:19 PM

S. Korea’s Auto Factories to Plug Off Additionally This Month Amid Poor Demand


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South Korea’s car and parts makers will go into additional shutdown this month in line with subdued global demand under pandemic impact. 

Renault Samsung Motors Co., Korean unit of French carmaker Renault S.A., will halt assembly lines at its Busan factory in southern Korea for four days – May 15, 22, 28, 29, according to industry sources on Thursday. The automaker will also suspend overtime on weekends in May. The production suspension is due to troubles of procuring parts supplies from Europe.

The closure for the Busan factory comes less than a week after it restarted assembly lines on May 10. The factory had been shut down since April 30. 

This leaves the automaker to run its factory in Korea only 11 days in May, half of normal work month.

“The company is experiencing production trouble due to parts supply problem from Europe,” said a Renault Samsung Motors official. To make up for the losses, the labor union has agreed with the management to work three extra hours when part supply conditions get better, the official added.

GM Korea, local operation of U.S. auto giant General Motors is also suspending factory operation. It stopped assembly lines at its main Bupyeong plant on Friday again after it halted production on Monday. The Bupyeong plant makes Chevrolet Trailblazer and Buick Encore SUVs mainly, with an annual production capacity of 200,000 units.

The automaker reportedly is halting production to adjust output against fall in demand from North America and Europe, on top of part supply issues. It has a plan of adjusting production schedule again next week.

SsangYong Motor Co., a SUV-focused producer under India’s Mahindra & Mahindra Ltd. is closing its main Pyeongtaek plant for eight days this month. It suspended operation of assembly lines for Korando and Tivoli on Monday, and lines for Rexton G4 and Rexton Sports on Tuesday.

The company plans to stop the assembly lines at Pyeongtaek plant in stages on May 21, 22, 28, and 29.

Kia Motors Corp. is shutting down Sohari factory in Gwangmyeong City, Gyeonggi Province, on May 22 and 25, and Gwangju plant on May 25-29 due to fall in overseas demand.

The troubles of finished car makers weigh heavily on local automotive parts makers.

The factory operation of primary parts suppliers has averaged 60 percent, according to a survey conducted by Korea Automobile Manufacturers Association on Wednesday. The situation is worse for the second-tier suppliers, with operation rate hovering at 30 percent.

A half of total 24 parts makers surveyed is currently closed temporarily or plans to suspend operation in line with finished car makers’ shutdown schedule.

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Tags:
car and parts makers renault samsung motors automaker busan factory gm korea bupyeong plant ssangyong motor pyeongtaek plant kia motors corp factory operation auto factories

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