General Motors Korea to cut output of SUV as coronavirus hits U.S. exports

General Motors

General Motors’ South Korean unit prepares to significantly cut output this month at a factory producing its new Trailblazer sport-utility vehicle (SUV), as the coronavirus pandemic weighs on its U.S. exports and also disrupts parts supplies.

GM Korea is responsible for providing some of automaker’s small SUVs to the U.S. market to meet a consumer transition away from sedans. Like peers industry-wide, however, it is having a hard time with shrinking exports as demand suffers from governments worldwide restricting movement to reduce the spread of the virus.

GM Korea will run its BP1 plant located in Incheon, near Seoul, for seven business days this month and idle it for the rest of the 11, showed its internal production plan.

A spokeswoman stated the automaker has postponed the line until May 5 because of the virus impact on parts procurement and U.S. sales, and that its production plan for the remainder of May is subject to change.

GM Korea started producing the Trailblazer in January and delivering it to the United States in February, but is yet to start U.S. sales, she said. The model is presently sold only in South Korea.

On components, the government’s virus response in the Philippines since mid-March has disrupted supplies of wiring harnesses, company officials stated.

South Korea experienced some of the earliest infections after the coronavirus started to spread from China, where it was first reported at the end of last year. The export-reliant economy has since managed to control the virus and permitted manufacturers to restart production – only to be met with declining overseas demand.

Total exports dropped 24.3% in April compared to the same month in 2019, trade ministry data revealed on Friday – the quickest contraction since May 2009. Shipments of vehicles dropped 36% and vehicle components declined 50%.

Hyundai Motor, the country’s biggest automaker by sales, has stopped production of most of its five factories in Ulsan in the southeast from April 30 to May 5 – including a weekend and public holiday, when it would normally run the plant at times of strong demand.

About 10,804 people in South Korea have been confirmed as being infected with the coronavirus. The virus has killed 254 people in the country.

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