Even as Hyundai’s South Korean home facility grapples with a workers’ strike on wage issues, its Indian subsidiary does not expect any immediate impact on production at home.
A spokesperson for Hyundai Motor India told Business Line that the company had local inventories for at least a month and “does not envisage any problem in supply lines.” The situation after that will be reviewed according to the outcome of worker-management discussions in Korea.
The smooth running of the Korean unit is critical for Hyundai India. This is because, apart from few critical components, the diesel engines are currently imported from Korea.
Engine supply
With the rise in demand for diesel cars, any delay in engine supply could lead to high waiting periods for diesel variants of models such as the Verna sedan and the i20 premium hatch.
“We do not expect any impact yet on our component and diesel engine supply because of the strike. We have adequate inventories right now,” Mr Bo Shin Seo, Managing Director of Hyundai Motor India, said.
Waiting period
In April, Hyundai India had increased diesel engine supply from Korea by 50 per cent to 10,500 units a month, helping it reduce the high waiting period for the i20 and Verna. It had also been considering a diesel engine plant in India, but recently put it on hold citing a lack of clarity on the Government’s fuel pricing policy.
In Korea, union leaders at both Hyundai and affiliate company, Kia Motors, are expected to hold wage talks with the management on Wednesday, according to media reports. A second partial strike is expected this Friday, following last Friday’s strike (July 13) after negotiations had fallen through. This was the first such worker protest in the last four years for the company at home.
The worries on output drop are high because workers are also expected to go on a summer vacation between July 28 and August 5.