Due to the Impact of COVID-19, 71% of Global Automobile Factories Have Shut Down

[Asia Economy Reporter Su-yeon Woo] Due to the impact of the novel coronavirus infection (COVID-19), it has been revealed that 71% of global automobile production plants have ceased operations. In the case of Hyundai Kia Motors, which has a high proportion of factories in Korea, the proportion of plants that have stopped operating is relatively low at about 35%, but the possibility of additional production stoppages remains due to a future decline in overseas demand.

According to the Korea Automobile Manufacturers Association on the 23rd, as of mid-April, the global plant operating rate of major automakers was estimated to be only around 29%. In other words, 71% of the plants were unable to operate normally and were closed.

This is the result of aggregating the operating rates of global plants in 14 countries including the United States, China, Europe, and India for 13 major automakers such as Volkswagen, BMW, Daimler Benz, Renault, PSA, GM, Ford, FCA, Tesla, Toyota, Honda, Nissan, and Hyundai Kia Motors.

Cars waiting for export at the Hyundai Motor Ulsan Plant yard.
Photo by Yonhap News

By company, GM suffered the greatest damage, with 34 out of 38 plants (89.5%) in 8 countries ceasing operations, and Daimler Benz experienced production disruptions at 24 out of 27 plants (88.9%) in 10 countries.

Next were FCA at 85.7%, Renault at 85.0%, Ford at 82.8%, BMW at 81.2%, PSA at 76.0%, Honda at 68.2%, Volkswagen at 61.5%, Nissan at 60.7%, Tesla at 50%, Toyota at 46.3%, and Hyundai Kia Motors at 35.3% (in order of plant shutdown rate).

While the shutdown rate of global companies reached as high as 71%, Hyundai Kia Motors’ shutdown rate was 35.3%, which is relatively low compared to major global automakers. As of mid-April, the impact of COVID-19 severely hit the United States and Europe, causing plants in those regions to halt rapidly, whereas Korean plants, which relatively contained the impact of COVID-19 early, maintained their operating rates.

However, if export volumes to the United States and Europe decrease starting in May, intermittent production stoppages at Korean plants cannot be ruled out. Chung Man-ki, chairman of the Korea Automobile Manufacturers Association, said, "Although the domestic plant shutdown rate is low, there are concerns about plant shutdowns or sharp sales declines due to overseas factors in the future," adding, "It is a time when the government’s active role is needed in terms of maintaining loan limits, expanding new loans, and various tax benefits."

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