Overseas Major Car Brands Operating Plant Ratio at 96.8%... Global Market Competition Intensifies

Jung Manki, Chairman of the Korea Automobile Manufacturers Association / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kiho Sung] The factory operation rate of major overseas automobile brands, which were hit by the novel coronavirus infection (COVID-19), has reached 96.8%. As competition in the global automobile market, which had stalled due to COVID-19, is intensifying, there are calls for the government to take active measures to enhance the competitiveness of domestic companies.

The Korea Automobile Manufacturers Association (Chairman Manki Jeong) announced on the 24th that, according to the results of a survey on the factory operation status by brand in major automobile-producing countries overseas (as of June 18, 3rd survey), the ratio of operating factories was 96.8%, indicating that most factories have resumed operations after the suspension caused by the COVID-19 crisis.

Looking at the status of operating factories in 13 major countries, Brazil is experiencing delays in resuming operations due to difficulties in preventing the spread of COVID-19, but major countries such as the United States, China, and Europe have all resumed operations.

By brand, except for Ford, PSA, and Japanese brands such as Toyota, Honda, and Nissan, whose factory operations in Brazil are delayed and show operating factory ratios in the 90% range, GM, FCA, Tesla, Volkswagen, BMW, Mercedes-Benz, and Renault all showed a 100% factory operation rate.

However, the actual factory operation rate of overseas brands is not high, at around 60-70%, due to infection prevention measures within factories, delays in parts supply, and decreased demand, and they are making every effort to normalize factory operations and production by brand.

Except for China, most countries still showed low production volumes, with a decrease of over 70% in May, but as demand began to recover compared to April, efforts are underway to expand production volumes by maintaining existing supply chains by brand. In China, following the COVID-19 downturn, rapid factory resumption and automobile demand policies such as purchase subsidies led to a unique production increase of 18.2% year-on-year in May.

Our complete vehicle industry has also resumed operations at all domestic and overseas factories, but it is understood that difficult conditions persist, such as crisis response production activities including temporary production volume adjustments.

In May, our companies temporarily suspended operations at U.S. factories, and concerns about parts supply disruptions remain in June, making normal operation of domestic and overseas factories uncertain. Automobile exports in May decreased by 57.6% year-on-year, recording the lowest performance this year, and cumulative overseas production in May decreased by 35.5% year-on-year, indicating continued sluggish production at domestic and overseas factories.

In particular, the decrease in complete vehicle production has led to a decline in parts suppliers' sales, with some secondary parts suppliers considering factory shutdowns, continuing the crisis situation in our automobile industry ecosystem.

Chairman Manki Jeong of the Automobile Association predicted, “As the global automobile industry resumes operations, competition for survival among companies will intensify,” and emphasized that to maintain normal production activities in our industry, the government must continue active measures such as ▲ rapid implementation of financial support measures including loan and guarantee programs for parts suppliers and maturity extension support ▲ expansion of public procurement and domestic demand promotion ▲ extension of deadlines for tax and various public charges ▲ expansion of employment retention support.

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