Parts makers’ funding crisis worsens due to reduced supply… Hyundai Motor Company’s Ulsan Plant 1 closed on 7-14 days
As the global automobile industry is facing difficulties due to the prolonged supply and demand for automotive semiconductors, domestic automakers are also starting to cut production in earnest.
According to the Korea Automobile Industry Association (KAMA) on the 6th, due to the shortage of semiconductors for vehicles, the domestic finished car industry started to cut production in earnest from this month, indicating that the recent supply of parts makers has decreased by 10-20%. In addition, as automotive semiconductor prices have risen by about 20%, the financial situation in the parts industry is worsening.
According to the results of a survey of 53 first- and third-tier suppliers by the Automobile Industry Association on the 2nd, 48.1% of the companies that responded that they are reducing production due to a problem in the supply and demand of semiconductors for vehicles were counted.
In addition, more than 40% of surveyed companies answered that their sales and operating profit in the first quarter of this year decreased from last year, and 49.1% said they were experiencing financial difficulties.
It was found that some parts makers are controlling production by working only for 3 days and closed for 2 days due to production cuts by automakers. In fact, 36.0% of respondents said that the production of parts decreased to less than 50% as the supply and demand shortage of automotive semiconductors prolonged, and 64.0% of the respondents declined to less than 20%.
The industry is concerned that the liquidity crisis could intensify due to a series of operational disruptions as the parts industry suffered the primary blow from Corona 19 and the semiconductor supply and demand crisis overlapped.
According to the association, as exports fell sharply due to Corona 19, the number of companies in the red among parts makers increased from 21 to 35 by the third quarter of last year, and total sales decreased by 9.7% compared to the same period last year. The operating margin fell to the 1% range.
Accordingly, some point out that it is urgent to prepare financial measures for the parts industry.
“In the short term, the liquidity crisis should be prevented by expanding support for parts industry securitization company guarantee (P-CBO) and deferring tax payments,” said Kim Joon-gyu, chairman of the Automobile Industry Association. There is also a need to apply.”
The domestic automaker industry has been relatively good at supply and demand compared to foreign companies thanks to its inventory management, but from this month onward, Hyundai Motor and Kia also began to cut production in earnest, and the’April crisis rumors’ is becoming a reality.
Since last month, Hyundai Motor Company has been adjusting its production plans by reducing overtime for each factory and producing them with priority from popular models, but eventually decided to suspend the operation of Ulsan Plant 1, which produces Ionic 5 and Kona from the 7th to 14th of this month. . In addition, the Asan plant, which produces Granger and Sonata, is also considering closing. Reporter Kim Ji-eun
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