Escalating tensions between North and South Korea may force manufacturers to shift production outside the peninsula. In an interview with CNBC, Dan Akerson, CEO of General Motors said they were ‘making contingency plans for the safety of their employees they best they could’ and might consider moving operations if things deteriorate further. India is one the locations that the carmakers in Korea might consider if such situation arises.
GM believes supply chain of the Spark (Beat in India) will be seriously impacted, as the small car is built in Korea and exported to US. India is one of the alternatives for the American company as the car is also built here in Talegaon and exported to Europe.
Hyundai operations might also be affected as the Korean manufacturer imports diesel engines for the operations in India. Though Hyundai is building a diesel engine facility in India, it is going to be a while before that becomes operational.
Mahindra & Mahindra has interest in Korea through their subsidiary, Ssangyong Motors. The company imports CKD units of the Rexton, but might hasten the process of moving part of the operations to India – that is mainly for cost benefits, but now also for more stable environment.
