SEOUL (Reuters) – South Korean car giant Hyundai Motor has increasingly relied on China to supply auto parts to its manufacturing hub at home in recent years. As the coronavirus spreads, its strategy could be backfiring.
“South Korean automakers are heavy on just-in-time delivery due to close geographic proximity to China. Other automakers have to carry more safety stock,” said Paul Stepanek, president at Complete Manufacturing and Distribution, which advises companies on sourcing supplies in Asia.
“Therefore, when there is a crunch on supply chains, the South Korean automakers feel it faster.”