Seoul (AFP)
In South Korea, the largest automobile production center in the world is shut down: Hyundai has ceased operations there, victim of the coronavirus epidemic which paralyzes Chinese factories at the risk of destabilizing production chains throughout the globe.
Hyundai can produce 1.4 million vehicles a year at its giant Ulsan complex, located on the coast to facilitate the import of spare parts and the export of cars.
But this industrial ballet seized up when the epidemic of viral pneumonia led China to prolong the closure of its factories beyond the New Year holidays. Many will not reopen until February 10.
Result: Hyundai has seen its supply of electronic wiring components, mainly produced in China, dry up. The fifth world manufacturer announced Tuesday to suspend all its production in its factories in South Korea, laying off some 25,000 employees.
"What a shame not to be able to work! There is nothing to do when you depend so much on one country," said Mr. Park, a worker from Ulsan.
It is the first large-scale example of the impact of the epidemic on industry outside of China. An interruption in production in South Korea for five days could cost Hyundai the equivalent of 450 million euros, according to estimates.
Hyundai is not alone concerned in the country: its subsidiary Kia suspended the activity of three factories on Monday, and the South Korean branch of the French Renault plans to stop next week its factory in Pusan (southeast).
"South Korean companies are sorely dependent on China for their spare parts. Problem: a missing piece is enough to do nothing more," observes Cheong In-kyo, economist at the South Korean University of Inha .
- Europe also affected? -
Far from Asia, repercussions are also expected. Italian-American Fiat Chrysler could halt production at one of its European factories for lack of components from China, boss Mike Manley told The Financial Times.
"The Chinese manufacturing industry is crucial for automobile production chains. Any slowdown or interruption in the manufacturing of a component (...) can cause bottlenecks and shutdowns of factories in countries like Korea, Japan, Iran or Tanzania, "say analysts at Fitch Solutions.
The impact is particularly marked in Asia, where production is extremely tight.
In the United States, the repercussions will be delayed but there could be an indirect impact on spare parts coming from other countries and comprising Chinese components, fears Kristin Dziczek, of the Research center on the automobile of Ann Arbor.
Manufacturers and equipment manufacturers "are considering how to adapt. But there are no production capacities the size of those in China that would be idle somewhere to fill shortages," she said.
A precedent exists: the global automotive industry suffered in 2011, after the Fukushima disaster shutdown of the sole factory of Renesas Electronics, a Japanese group then dominating 50% of the global market for electronic control systems brakes and motors.
- "Multiple supplies" -
Since then, production chains have become more diversified.
However, "there is a great risk of having a single supplier in one place for a given part", underlines Ferdinand Dudenhoeffer, of the automotive research center of the University of Duisburg-Essen.
The norm is "to have at least two suppliers" and the subcontractors are usually in the same region as the production factories, he adds.
The disruption is expected to extend beyond the automobile, predicts Cheong.
China is the world's largest exporter of goods: cumulative exports from mainland China and Hong Kong last year exceeded $ 450 billion to the United States, $ 150 billion to Japan, and $ 110 billion to Korea or Vietnam. .
"China is an integral part of manufacturing chains, it weighs a fifth of global manufacturing production," said Mark Zandi, economist at Moody's Analytics. Taiwan and Vietnam, then Malaysia and South Korea, will be penalized in particular.
And beyond? According to the German Ifo Institute, Chinese manufactured components represent 9.4% of the semi-finished products imported by Germany.
© 2020 AFP