Genesis GV80 to Increase Production by 1,000 Units per Month... 'Delivery Delays' to Ease

Ulsan Plant 2 GV80 Production Volume Increased from 4,400 to 5,400 Units per Month
Temporary Adjustment of Production Ratio Until the End of July Due to Backlog in Waiting Demand

Genesis GV80 (Photo by Genesis)

[Asia Economy Reporter Kim Ji-hee] Hyundai Motor Company has decided to increase production of the Genesis ‘GV80,’ which has seen explosive popularity and a backlog of demand. By boosting GV80 production, the company aims to actively respond to domestic sales and overcome the challenges posed by the novel coronavirus disease (COVID-19).

According to industry sources on the 12th, Hyundai Motor’s labor and management agreed the day before to increase the production volume of the Genesis GV80, which is manufactured on Line 1 of Ulsan Plant 2. With this agreement, the monthly production volume of the GV80, which was around 4,400 units, will increase to 5,400 units per month. The plan involves adjusting the production volume of the Hyundai Tucson, which is produced mixed on the same line, and increasing the unit per hour (UPH) production rate of the GV80. Gradual production increases will begin from this day, and the line will operate at the adjusted ratio until the end of July, before the summer vacation period.

With additional weekend overtime work, the supply of GV80 is expected to increase by about 3,000 units by July, easing Hyundai Motor’s concerns. Despite the GV80’s blockbuster success, Hyundai had not been entirely relieved. The GV80, the first sports utility vehicle (SUV) of the Genesis brand, received 15,000 contracts on its launch day alone. This volume accounted for more than half of the annual target (24,000 units) in just one day.

As a result, the delivery period for the GV80 is also expected to be shortened somewhat. As of last month, the fourth month since its launch, only 9,115 units had been delivered in total. Since contracts for this year’s production volume were completed early, even those who signed contracts in April are reportedly only able to receive their vehicles next year.

It is also notable that Hyundai decided to adjust UPH rather than carry out separate line construction for this production increase. The mixed production ratio adjustment method allows for a more immediate response to demand using existing lines and is advantageous for temporary production volume adjustments. Especially, utilizing idle lines is expected to have a twofold effect. Currently, the Tucson produced on the same line needs a production reduction. Due to the global spread of COVID-19, export volumes have decreased, and with a full model change scheduled for the second half of this year, production of the existing model must also be reduced.

This decision is interpreted as part of efforts to find a breakthrough in the domestic market, which is performing relatively well amid the prolonged impact of COVID-19 in major automobile markets such as the United States and Europe. Hyundai has repeatedly expressed its intention to increase production of popular models to secure profitability since the spread of COVID-19 both domestically and internationally. In fact, even in February, when domestic plants were consecutively shut down, Ulsan Plant 2, where the GV80, Palisade, and Santa Fe are produced, proactively resumed operations first.

Currently, Hyundai models experiencing delivery delays in Korea include the Genesis GV80 and the new G80, as well as the Grandeur and Palisade. Accordingly, Hyundai is expected to increase production of other popular models as well by adjusting mixed production ratios, similar to the GV80, to prevent customer attrition due to prolonged waiting periods.

An industry official said, "Most of the vehicles with concentrated waiting demand are high-profit models, so increasing their supply is also positive for Hyundai’s profitability," adding, "With export volumes decreasing due to the COVID-19 situation, there are ‘idle lines,’ so we will actively consider increasing production by utilizing these."

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