[Exclusive] Hyundai Motor Temporarily Halts Bus Production "Inventory Adjustment Due to COVID-19"

Hyundai Motor Company Jeonju Plant

[Asia Economy Reporter Changhwan Lee] Hyundai Motor Company will temporarily halt the production of major buses. This is to adjust inventory due to a significant drop in sales of tourist buses caused by COVID-19. It is also understood that adjustments in production volumes by model due to the shortage of automotive semiconductors have had an impact.

According to the automotive industry on the 10th, Hyundai Motor's Jeonju Plant 1 express bus line and Plant 2 Solati line stopped production starting from the 8th. These lines are scheduled to be closed for two weeks until the 19th. The County line at Plant 1 is also planned to suspend production for five days from the 15th to the 19th.

Hyundai Motor's Jeonju Plant specializes in manufacturing commercial vehicles such as buses and trucks. It has an annual production capacity of about 100,000 units and an independent production system capable of developing and producing exclusive models for buses and large trucks.

The apparent reason for the line shutdown this time is the stagnation of the tourism industry due to the spread of COVID-19. Last year, Hyundai Motor's domestic sales of commercial vehicles (CV) were 158,453 units, about 5% less than 166,834 units the previous year. During the same period, exports decreased by 33.6%, from 58,386 units to 38,746 units.

Due to the decrease in demand for commercial vehicles, Hyundai Motor's Jeonju Plant also suspended production for about a week in January. At that time, Hyundai Motor stated that production was halted to maintain an appropriate inventory level due to the decline in demand for commercial vehicles.

The shortage of automotive semiconductors is also known to have influenced part of the production suspension. As the global shortage of automotive semiconductors disrupted the supply of related parts, production volumes by model were adjusted accordingly.

Hyundai Motor and Kia currently have significantly reduced weekend overtime work at major plants nationwide due to the unstable supply of automotive semiconductors. They are also checking semiconductor inventory on a weekly basis and operating production lines focusing on models with stock. Instead of relying solely on first-tier suppliers to secure inventory, they are directly negotiating with semiconductor makers to secure automotive semiconductor supplies.

Market information firm IHS Markit forecasted that due to disruptions in the automotive semiconductor supply chain, global automobile production in the first quarter of this year will be delayed by nearly one million units.

An industry insider said, "Hyundai Motor and Kia, like other automakers, are experiencing difficulties in semiconductor supply," adding, "I understand that they are mainly allocating semiconductors to best-selling models and adjusting production volumes of less popular models as a response."

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