How Did Japan’s Earthquake Affect South Korean Automakers?

South Korea is located a couple  miles off Japan's western coast, so it isn't surprising to learn that some of its domestic automakers have been impacted by the recent earthquake -- albeit in a much less severe manner.

Many Japanese automakers are now reporting their facilities are able to resume production any day now, but suppliers of key components are still struggling to resume production. As a result, several facilities in Japan (and even some in the U.S., including the Louisiana plant which builds the Chevrolet Colorado and GMC Canyon) have been forced to postpone vehicle assembly.

Since some South Korean automakers also source a sizable amount of vehicle content from Japan, they now face a similar issue. Renault-Samsung, which builds a number of bespoke Renault- and Nissan-based vehicles for the Korean market, has halted both weekday overtime and weekend shifts. The slowdown will continue through the end of March, meaning production volumes may drop by 2000-2500 units in total.

General Motors Korea (formerly known as GM Daewoo), is likewise facing a similar production hangup, and a spokesman tells Automotive News the company is working to reassess component supplies and adjust production schedules accordingly. This could impact vehicle supplies for both Asian and European markets, but production of U.S.-spec Chevrolet Cruze and Sonic (nee Aveo) models has been relocated to plants within North America.

The lone Korean automaker seemingly avoiding these woes is Hyundai/Kia. According to a company spokesperson, only one percent of the company's parts are sourced from Japanese companies (a sizable portion are actually supplied by Hyundai Mobis, a firm also owned by Hyundai's parent organization). Notable Japanese parts include an Aisin automatic transmission for the Veracruz crossover, along with alternators for small diesel engines and the Lambda V-6 range (used in the likes of  the Genesis Coupe, Veracruz, and Azera).

Hyundai has built commendable momentum in the global auto market over the past decade, but if key competitors -- namely Toyota and Honda -- are impacted by the natural disaster for a prolonged period of time, the Korean automaker may witness additional growth in the months to come.

Source: Automotive News (Subscription required)

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