Kia Motors informed its labor union in South Korea that it wants to shut operations at three of its domestic plants as the coronavirus pandemic weighs on exports to Europe and the U.S., a union official stated Monday.
The union has not yet determined whether to accept the plan – under which manufacturing activities would be canceled from April 23-29 – because talks over pay are ongoing, the official stated.
“Kia Motors is currently reviewing the closure of some of its factories in Korea in response to declining global demand because of COVID-19. However, a choice has not been made at this time,” Kia Motors stated.
Kia Motors’ share plunged 3.4%, and that of associate Hyundai Motor plunged 2% in a wider market that was a 0.7% decrease in morning trade.
Hyundai Motor shut a line manufacturing its Tucson sport utility vehicle in the southeastern city of Ulsan from April 13-17.
Hyundai and Kia Motors have canceled operations at most of their plants outside South Korea and China as the coronavirus spreads fast beyond Asia.
Government bans on movement to contain the spread are impacting consumer spending globally.
South Korea’s deliveries for the first ten days of April dropped 18.6% from the same interval a year earlier, far below the 20.8% jump over March 1-10. Deliveries of automobiles and vehicle components through the period slumped 7.1% and 31.8%, respectively.