South Korea unit of General Motors ( NYSE: GM ) has suspended production at its two factories Changwon and No. 2 Bupyeong plants since last week after a local supplier refused to supply parts - Reuters .
The production at No. 1 Bupyeong plant, which makes Trailblazer sport-utility vehicle (SUV) remains unaffected.
South Korean autoparts maker ERAE AMS, which manufactures auto parts, such as automotive generators, calipers and brake parts, demanded a price hike for its parts and refused to supply parts to GM Korea's factories.
The company is in discussions with ERAE AMS to resolve the issues.
ERAE AMS has production sites in South Korea, China and United States and supplies to major automakers, including Volkswagen AG ( OTCPK:VWAGY ), Hyundai Motor ( OTCPK:HYMTF ) and BYD ( OTCPK:BYDDY ) among others.
Changwon and No. 2 Bupyeong plants have a combined annual production capacity of about 70,000 vehicles, representing 30% of GM Korea's total annual production capacity last year.
In the last week of June, GM Korea President Roberto Rempel announced the company's target to turn a profit next year, while it aims to hit break-even this year with no plans to produce electric vehicles.
As per filings, GM Korea has reported losses for eight consecutive years since 2014.
GM Korea’s sales volume declined from over 800,000 units in 2011 to 230,000 units last year.
The company is all set to report Q2 earnings on July 26, 2022. Analysts expects EPS of $1.32 and revenue of $34.35B for the quarter .
Stock gets a Buy rating from Wall Street Analysts in contrast to Hold rating by SA Quant rating system.
GM lost around 44% since the start of 2022.
Read the most recent analysis on the stock here .
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Geneal Motors' South Korea unit suspends production at two factories over auto parts supply issues