Kia Motors Secures 'Wiring Alternative Suppliers' in Vietnam and Cambodia

[Asia Economy Reporter Kim Hyewon] Hyundai Kia Motors, facing a production halt crisis due to supply disruptions of 'wiring harness' parts caused by the outbreak of the novel coronavirus infection (Wuhan pneumonia), has secured alternative parts in some Southeast Asian regions. Domestically, additional parts are being supplied, and negotiations have begun with the Shandong provincial government, where local factories in China are concentrated, to resume production early, preparing simultaneous countermeasures to keep the factories running.

According to the industry on the 3rd, Hyundai Kia Motors reportedly procured some alternative quantities of the integrated wiring device 'wiring harness' parts, which have a high dependency on China, from Vietnam and Cambodia. A Kia Motors official stated, "Following the production plants across China, domestic plants will decide whether to suspend operations within this week. Since wiring harnesses produced in Vietnam and Cambodia will be concentratedly supplied to Kia Motors, there is a possibility that the Kia Motors production line can operate normally."

Hyundai and Kia held a final inspection meeting on the morning of the same day to check parts inventory, procure alternative parts, and discuss the operation timing of Chinese partner companies, deciding whether to suspend operations. To temporarily halt domestic plants, prior agreement on suspension conditions with the labor union is also essential.

Hyundai Motor President Ha Eontae, in a message titled 'Regarding the Novel Coronavirus, a Message to Employees' on the same day, said, "Due to supply disruptions of Chinese parts, it is expected that our plants will inevitably have to suspend operations," adding, "There are differences in inventory quantities by plant and line, and the company is doing its best to secure parts supply. Therefore, the timing and method of suspension may vary, and the end of suspension is inevitably fluid in this emergency situation," requesting the union's cooperation.

SsangYong Motor decided to stop operations at its Pyeongtaek plant from the 4th to the 12th. SsangYong explained, "This is due to parts supply disruptions caused by the Chinese government's ban on factory operations to prevent the spread of the novel coronavirus," adding, "The schedule for resuming production may change depending on the situation in China." If the primary contractor's factory does not operate, all first to third-tier suppliers must also halt work.

As production disruptions spread not only to Hyundai Kia Motors but across the entire automotive industry, the government is also negotiating with the Chinese side behind the scenes. A local source said, "Rather than completely stopping factory operations, the public and private sectors are separately and jointly working to produce products even at reduced operating rates," adding, "They are consulting with local Chinese governments on various measures, such as advancing the production resumption period during the forced holiday depending on the urgency of parts made by Chinese partner companies." However, the source added, "In the case of wiring harnesses, which require hundreds to thousands of workers, there may be difficulties securing operating personnel if workers hesitate to come to work due to the risk of the novel coronavirus outbreak."

This content was produced with the assistance of AI translation services.