Hyundai, Asia’s fifth most valuable automaker, with a market value of approximately $ 44 billion, achieved an 8% increase in profit in the first quarter of the year, the result of a low base in the quarter of the year earlier, when demand for vehicles plummeted due to the coronavirus, but also thanks to a healthy stock of chips.
This gave it a relative advantage over General Motors, Stellantis, Ford and Volkswagen, which cut production since January due to a shortage of automotive semiconductors. But now, this advantage has begun to blur.
The shortage, compounded by factors including a fire at a chip factory in Japan and storms in Texas, is now catching up with Hyundai. The South Korean automaker, which along with subsidiary Kia is among the world’s top 10 automakers by sales, has temporarily halted production three times since early April and saved chips for its most popular models.
The automaker has seven plants in South Korea (five in Ulsan, one in Asan and one in Jeonju), and ten plants abroad, four in China and one in the United States, the Czech Republic, Turkey, Russia, India and Brazil. Their combined capacity reaches 5.5 million vehicles.
The company has already suspended operations at the Asan plant and the Ulsan plant, where it produces the Ioniq 5 all-electric car and the Kona subcompact SUV. According to the company, the stoppage followed a lack of semiconductors used in Kona’s camera system and a problem in the production line of its supplier Hyundai Mobis, which produces the traction motor for the Ioniq 5.
Hyundai estimates it will stop producing about 12,000 vehicles due to the chip crisis, potentially hurting the company’s future results.
Among the automaker’s suppliers that have been affected by the semiconductor shortage, in addition to Hyundai Mobis, are Continental and Denso, among others.
“This crisis has made us have to adjust the business plan, sometimes even every week. The issue of semiconductors has affected us all, ”said Claudia Márquez, CEO of Hyundai in Mexico.
In 2021, the brand’s Mexican subsidiary has set the goal of slightly increasing its market share, to 3.5%, from 3.4% in 2020. But the global shortage of automotive semiconductors is not likely to decrease anytime soon. term, but until 2022.
“We expect a 12% growth as an industry in 2021 and on this we have our business plan”, concluded Márquez.
