Many large South Korean auto parts manufacturers announced the suspension of production

Many large South Korean auto parts manufacturers announced the suspension of production
As the epidemic continues for a long time, the operating conditions of the Korean auto parts industry, which is increasingly tight, have become increasingly difficult. A few days ago, many large South Korean auto parts manufacturers announced the suspension of production, which directly affected the normal production of Korean automakers. For the relevant situation, I will immediately connect with the special reporter Xuan Lina of the financial channel in Seoul. What is the current operating status of the Korean auto parts industry? What impact will it have on the Korean automobile industry chain?
Finance Channel Special Correspondent Xuan Lina: Last week, the South Korean company of Gates, a global automotive belt manufacturer, announced that it would close its Korean plant and withdraw from the Korean market this month. Earlier, a Korean company that produced fuse boxes and seat accessories for Hyundai Motor’s Santa Fe and other models also announced that it would stop production.
It is understood that there are not many parts and components related to Hyundai’s inventory. Hyundai is currently negotiating with this company to restart production, and finally assemble the affected models after the relevant parts are in place.
As the epidemic continues to spread, problems have appeared in some links in the industrial chain. Almost all large-scale car companies in South Korea and the world have experienced a decline in production due to large-scale shutdowns, which has reduced the demand for parts and components in the market and made Korean auto parts Enterprises are caught in the dilemma of both domestic and overseas orders diving.
In May of this year, South Korea’s auto exports fell 54% year-on-year, and auto parts exports dropped by 66.7% year-on-year. According to data from the Korea Automobile Industry Federation, the operating rate of large auto parts companies that directly cooperate with vehicle manufacturers was only 60% in May, and the operating rate of small and medium-sized parts companies that accepted orders from large auto parts companies dropped to 30. %-40%.
In the first quarter of this year, among the more than 80 listed auto parts companies in South Korea, about 80% of the companies’ performance deteriorated, and nearly half of the companies have already experienced deficits. Although the South Korean government has issued support policies several times recently, and has provided 2 trillion won, or about 11.8 billion yuan, of special low-interest loans to parts and components companies, it is tantamount to a drop in the bucket for companies.
Under the epidemic, the difficulties of automakers have led to the deterioration of the operations of Korean parts and components companies. The current shutdown of some parts and components companies has in turn affected the production of Korean automakers, forming a vicious circle in the automotive industry chain. As the industry is looking forward to a recovery in global automobile sales, how can Korean parts companies persist in the industry’s recovery? How will the government’s next support measures be carried out? We will continue to pay attention to relevant developments.