Carona virus infection in China has started to affect the markets and economy around the world.
Coronavirus Impact On Hyundai Motors
Corona virus infection in China has started to affect the markets and economy around the world. With this, the industry has also not remained untouched. The car factory with the highest production capacity in the world was temporarily closed on Friday. Hyundai, a South Korean automobile company, has stopped operating its huge Ulasan plant. In fact, due to the impact of industrial production due to coronavirus infection in China, there has been a shortage of auto parts. The plant has a capacity to produce 1.4 million vehicles annually.
$ 500 million loss
According to analysts, this is going to have a serious impact on Hyundai. Keeping the plant closed for 5 days will cause an estimated loss of at least 600 billion won. This plant is located on the seashore. This allows it to easily import components and export finished vehicles. China has ordered the closure of factories to prevent further spread of coronavirus infection. Due to this, it is becoming difficult for the industries dependent on components manufactured in China to continue operating. Hyundai has a shortage of goods that connect the electronic equipment of the vehicle plant. For this reason, other companies, including Hyundai in South Korea, have stopped operations for the time being.
25 thousand workers sent on leave
Only in South Korea, about 25 thousand workers have been forcibly sent for this reason. Park, who works at the Ulasan plant, said that it is a matter of shame that I cannot come to work and will have to accept a cut in salary. This is very uncomfortable. Analysts believe that this is the first example of the closure of factories outside China due to coronavirus.
Kia Motors also closed 3 plants
Hyundai’s subsidiary Kia Motors has decided to close 3 plants on Monday. Apart from this, the South Korean subsidiary of Renault is going to keep the Busan plant closed next week. Fiat Cruiser has also said that it may be forced to stop operating its European factory for the time being. Chiong In-kyo, an economics professor at Inha University in South Korea, said that the biggest problem is how we will overcome this transition in China, we do not know. South Korean companies are largely dependent on China for components. The problem is that if there is a shortage of any part then you cannot continue operating.
May have effect worldwide
He warns that this is only the beginning. This crisis will spread to other areas besides the automobile sector. Moody’s Analytics Chief Economist Mark Jandi said that China has become an integral part of the global manufacturing supply chain and has a 20 per cent share in global manufacturing. The closure of the factory in China will first affect its neighboring countries Taiwan and Vietnam, followed by Malaysia and South Korea. Due to long supply chain links, it may take some time to see its impact in the US and other parts of the world.