India Faces Worsening COVID-19 Situation, Increasing Damage to Korean Companies

164 Korean company officials staying in India, where the spread of the novel coronavirus infection (COVID-19) is severe, are returning home on the morning of the 9th via a special flight operated by Asiana Airlines. [Image source=Yonhap News]

[Asia Economy Reporter Changhwan Lee] As COVID-19 resurges in India, it has been revealed that Korean companies are also suffering significant damage. Major industries such as automobiles and electronics are experiencing considerable losses, prompting companies to devise countermeasures.

According to related industries on the 15th, Hyundai Motor's wholesale sales in the Indian market last month were 49,002 units, a 6.8% decrease compared to the previous month. Kia's sales were 16,111 units, down 15.6% from the previous month. The rapid spread of COVID-19 in the Indian market since April is analyzed as the cause of the decline in sales for both companies compared to the previous month.

The daily new COVID-19 cases in India exceeded 400,000 for the first time in the world on the 1st, escalating the crisis to its worst level. Consequently, Korean companies operating locally have shifted most employees to work from home except for the minimum workforce required to operate factories, and are sending expatriate families back to Korea.

Hyundai Motor and Kia are also responding by reducing factory overtime and cutting production to minimize damage. The worsening sales conditions, including some dealerships closing due to the COVID-19 spread, are also reasons for production cuts. As medical oxygen became scarce, Hyundai Motor converted industrial oxygen for medical use and urgently changed some automobile production lines to oxygen generator production.

New car launches have also been postponed. Hyundai Motor planned to launch the sports utility vehicle (SUV) Alcazar in India last month but postponed it due to the COVID-19 spread. The Alcazar is a new model Hyundai Motor carefully developed to target the rapidly growing Indian SUV market.

India is an important market for Hyundai Motor, ranking second in sales after North America among overseas markets, and the company even produces models specifically for the local market.

The electronics industry is also heavily affected. Samsung Electronics operates its Noida smartphone factory and Chennai home appliance factory while shifting employees to work from home. They are also supporting the return of expatriate families.

LG Electronics is operating its Noida and Pune factories with reduced production plans compared to before. LG Electronics also has most employees working from home except essential personnel and supports the repatriation of local expatriate families.

Korean companies are strengthening social contribution activities such as donating medical support funds and supplying oxygen generators locally, but as the damage spreads, it is expected that the impact will be unavoidable for some time.

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