Hyundai Motor Faces Production Halt Amid Parts Supply Disruptions & labor Tensions
Seoul, South Korea – September 26, 2023 – Production at KiaS Gwangju plant 1 and 2 has been temporarily suspended due to a strike at Hyundai Mobis subsidiaries, Mottras and Unitus, disrupting the supply of critical auto parts. the disruption highlights vulnerabilities in Hyundai Motor Group’s “just-in-time” (JIT) production system,which minimizes parts inventory and leaves production lines susceptible to supply chain interruptions.
Kia, a major manufacturer within Hyundai motor Group, produces passenger cars, SUVs, and electric vehicles. the recent labor action at Mottras and Unitus directly impacted parts delivery, forcing the Gwangju plant shutdown.
The situation is further elaborate by external factors impacting Hyundai’s profitability. In the U.S. market, the company faces a 25% tariff, reducing price competitiveness against Japanese and European automakers. Management is also navigating ongoing labor-management risks and intensifying global competition.
Hyundai Mobis, a core parts company for the Hyundai Motor group, specializes in the development and production of auto parts, including electronic components, eco-amiable vehicle parts, braking, steering, and suspension systems. The company’s production is intrinsically linked to the output of Hyundai and Kia’s finished vehicle lines. The JIT system means disruptions at the parts level quickly translate to disruptions in vehicle production, emphasizing supply chain risk within the group.
Beyond the immediate strike, Hyundai Mobis faces challenges related to supply chain stability, labor relations, global component competition, and potential shifts in government labor policy.
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