[Exclusive] Kia Production Stopped Again... This Time Due to Fuel Tank Supply Shortage

[Image source=Yonhap News]

[Asia Economy Sejong=Reporters Kim Hyewon and Sung Kiho] Some production lines of finished vehicles have once again come to a halt due to the suspension of deliveries by a primary supplier of fuel tanks to Hyundai Motor Company and Kia. The supply shock was directly hit by raw material shortages following the Cargo Solidarity Union strike, and the rise in raw material prices also appears to have affected the mass production of fuel tanks.

According to the related industry on the 1st, T.I. Automotive sent an official letter on the 29th of last month to Hyundai Motor Company and Kia's chassis parts purchasing and development team, notifying them of the inability to supply fuel tanks.

In the letter, the company explained, "On the 24th (of last month), we requested understanding for a 20% production cut this week and a 30% cut next week, but since this was not reflected in the actual ranking, supply disruptions occurred."

Accordingly, production disruptions sequentially occurred starting with the Sorento production line at Kia Hwaseong Plant 1 the day before, followed by the Sportage at Gwangju Plant 2, and the Carnival at Gwangmyeong Plant 1. The fuel tanks affected by this supply shortage are 3 out of 7 specifications and are mainly parts installed in hybrid vehicles.

The primary reason T.I. Automotive suddenly notified Hyundai Motor Company and Kia of the supply suspension is that due to the Cargo Solidarity Union strike, they could not properly receive raw materials from lower-tier suppliers, making production difficult. Finished and semi-finished product inventories have been depleted, fundamentally limiting the ability to supply fuel tanks.

As a secondary cause, it is reported that the rise in raw material prices and the shift in policy from internal combustion engine vehicles to eco-friendly vehicles are intertwined. An industry insider said, "Many suppliers feel burdened in production due to the rise in raw material prices compared to the delivery price," adding, "There are voices on the ground calling for the realization of delivery prices." Also, as Hyundai Motor Company and Kia gradually reduce the proportion of internal combustion engine vehicles and transition to eco-friendly vehicles, fuel tanks are classified as manufacturing specification industries, and a reluctance among suppliers to produce them is being sensed.

Hyundai Motor Company and Kia, which have repeatedly experienced production stoppages and customer delivery delays due to domestic and international parts supply shortages, have launched an urgent review of production plans due to this fuel tank supply suspension.

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