Thursday, April 9, 2020
Korean Companies Halt Production Lines in India Due to Coronavirus
In Line with Indian Government's Decision
Korean Companies Halt Production Lines in India Due to Coronavirus
  • By Michael Herh
  • March 24, 2020, 09:58
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Samsung Electronics’ smartphone factory in Noida, India

Korean companies operating in India have stopped their local production lines in line with the Indian government’s efforts to prevent the spread of COVID-19.

"Abiding by the Indian government's decision, we will halt the operation of Noida Plant which produces smartphones and Chennai Plant that produces home appliances until the end of this month," Samsung Electronics said on March 23.

The Indian government issued an emergency administrative order to temporarily suspend the operations of all business sites in Chennai except essential places such as hospitals and public offices. The deadline is the end of this month. However, the order may be extended pending the proliferation of the COVIOD-19 virus.

Samsung Electronics has steadily expanded Noida Plant, saying it will increase the annual smartphone production at the plant to 120 million units in 2020. Industry watchers expect that the plant shutdown will disrupt production of Samsung's budget smartphones targeting India, including the “Galaxy M.”

LG Electronics will also stop operating production plants in Noida and Pune until the end of March. These plants produce home appliances such as washing machines. The plant in Pune also produces some smartphones.

Consumer electronics companies such as Samsung and LG have also hit a snag in overseas sales. “We will temporarily stop sales in stores for the safety of our customers and employees,” announced Best Buy, which operates more than 1,000 consumer electronics stores throughout the United States, on its website on March 23. “Instead, we have introduced a door-to-door delivery service for customers in an untact manner.” Best Buy does not provide installation services for large TVs and refrigerators by professional technicians due to virus infection concerns, which will hinder its normal sales activities.

Europe's largest consumer electronics store, MediaMarkt, has also shuttered more than 850 stores in major countries since the middle of March. "In North America and Europe, not many customers use installation services for large home appliance unlike Korea, but if offline stores are closed, there will deal a blow to promotions of large home appliances and new products," said an official at a household appliance company

Hyundai Motor also stopped operating the first and second factories in Chennai on the day. Hyundai's Chennai plant produces 680,000 units of the Crete, the Santa Fe, the Eon, and the i20 annually. Kia Motors is also considering discontinuing production at its plant in Andhra Pradesh, India. Andhra Pradesh is not included in the Indian government's business suspension, but Kia Motors is responding by reviewing a shutdown of the plant as it may be designated later depending on the spread of the novel coronavirus in the future.

The shutdown order sounded the alarm for POSCO. "We are placing in place a remotely working system and cooperating closely with the government of India," said POSCO which decided to stop a processing center in Delhi and a processing center in Pune by the end of this month. Hyundai Steel's coil mill and steel pipe manufacturing plant in Tamil Nadu, India, will also put production on hold during the same period.