Shutdowns Spread to Korean Factories in India

  • By Oh Rora

    March 24, 2020 11:42

    Factory shutdowns due to the coronavirus pandemic have spread to India, where major Korean businesses like Samsung, LG and Hyundai have halted production of smartphones, home appliances and cars.

    India had reported a suspiciously low 415 cases of coronavirus and seven deaths by Monday, which would make it one of the world's least affected regions, but some Indian state governments have taken tough measures to prevent the spread of the virus and ordered factories to close until March 31.

    Samsung shut down its plant in Noida, Uttar Pradesh on Monday. It makes the mid-priced Galaxy A and M series of smartphones. The M series is sold exclusively in India.

    But the Noida plant has also received some production allocations for Samsung's high-end Galaxy S20 released last month, and a prolonged factory closure could lead to complications in new product rollouts.

    Samsung spent US$700 million in 2018 to double output at the plant, which now manufactures 100 million smartphones a year or a whopping 30 percent of the company's annual phone production. Samsung also closed its home appliance factory in Chennai, Tamil Nadu.

    LG halted production at factories in Noida, where it manufactures TVs, refrigerators and air conditioners, and in Pune, Maharashtra, where it makes phones for sale in India.

    Chinese smartphone makers OPPO and Vivo and Sweden's Ericsson also closed plants in Noida. The stoppages have prompted industry watchers to project a sharp decline in handset output this year.

    Global smartphone production already declined 38 percent in February compared to the same period of 2019, the steepest fall on record.

    Hyundai is halting production at its two plants in Chennai. Hyundai already halted production at its manufacturing plants in the U.S. state of Alabama and in the Czech Republic, while affiliate Kia Motors halted production in the U.S. state of Georgia and in Slovakia.

    Hyundai's Chennai plant turns out 700,000 cars a year -- the Creta and Santa Fe SUVs, and Eon, i20, Elantra and Accent passenger cars -- and employs around 7,000 workers. The automaker hoped to boost output to 750,000 vehicles this year. After competition intensified in China, Hyundai set up new plants in India and began raising their output.

    Kia has a factory in Anantapur, Andhra Pradesh, where it has been producing the small Seltos SUV since last August. The local government has not yet ordered the closure of manufacturers, but it is considering doing so to protect the health of its workers.

    Korean steelmakers are also affected. POSCO's plants in Bhubaneswar, Odisha and Pune have temporarily closed, as have Hyundai Steel's coil and pipe plants.

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