<\/p>\n
Hyundai Motor Co is rerouting ships around Africa to avoid the Strait of Hormuz, slowing the automaker\u2019s global supply lines as the war in Iran adds pressure to an already strained movement of goods.<\/p>\n
\u201cWe have deviated our ships to the Cape of Good Hope,\u201d chief executive officer Jos\u00e9 Mu\u00f1oz said on Wednesday in an interview, referring to the southern tip of South Africa. \u201cThis is a lot of additional lead time.\u201d<\/p>\n
The shift is part of a broader plan to rework its operations to insulate the company from supply-chain shocks, tariffs and geopolitical tension, he said.<\/p>\n
Read:
Strait of Hormuz closed again as Israel intensifies strikes against Lebanon
US and Iran agree to ceasefire hours before Trump deadline
Oil and gas prices plunge after US and Iran agree to a ceasefire<\/p>\n
Longer term, Hyundai is seeking to source more components locally in Europe rather than ship them from South Korea, a path that relies on\u00a0passing through\u00a0the Strait of Hormuz.<\/p>\n
Hyundai has been keeping more inventory on hand to buffer against supply shocks since the global pandemic upended supply chains, Mu\u00f1oz said.<\/p>\n
Meetings to make supply-chain decisions \u2013 once an annual occurrence \u2013 are now happening on roughly a weekly basis, he said.<\/p>\n
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\u201cWe try to put together supply and demand, take decisions and maximise as much as we possibly can the production capacity that we have, so that we don\u2019t lose production,\u201d Mu\u00f1oz said.<\/p>\n
\u201cBut it\u2019s tough. It\u2019s never been as tough as it is now.\u201d<\/p>\n
Investors globally anticipate extended disruptions to traffic through the strait, even after news of a ceasefire agreement between the US and Iran that sent\u00a0oil prices tumbling\u00a0more than 17% on Wednesday.<\/p>\n
Hyundai has largely been able to maintain production due to its built-in flexibility, Mu\u00f1oz said.<\/p>\n
Listen\/read:\u00a0Iran ceasefire offers short-term relief, long-term risks remain elevated<\/p>\n
The company is navigating a volatile car market in the US, as affordability challenges, rising gas prices and the loss of electric-vehicle incentives pressure sales. Still, Hyundai saw a significant jump in first-quarter sales of electric vehicles (EVs) from a year ago.<\/p>\n
The CEO said EV demand will persist even if not at the levels once expected.<\/p>\n
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Hyundai\u2019s new assembly plant near Savannah, Georgia, was originally intended to make only pure EVs \u2013 the Ioniq 5 and 9 models \u2013 but will begin making hybrids in 2026 and range-extended electric models in 2027.<\/p>\n
The Savannah plant will also start making modified EVs for Alphabet Inc\u2019s Waymo driverless-car business this year. Production will start with a few thousand, eventually climbing to \u201ctens of thousands\u201d of robotaxis at the plant, Mu\u00f1oz said.<\/p>\n
Read: Alphabet\u2019s Waymo to expand its Robotaxi fleet with Hyundai EVs [Oct 2024]<\/p>\n
Longer term, Hyundai wants to increase capacity in the US by about 300 000 units to 1.2 million by 2030 and localise 80% of its supply chain domestically to further insulate the business from tariffs and supply shocks.<\/p>\n
\u201cGlobalisation is over,\u201d said Mu\u00f1oz . \u201cIt\u2019s completely over.\u201d<\/p>\n
\u00a9\u00a02026\u00a0Bloomberg<\/p>\n
#Hyundai #reroutes #ships #Cape #Hormuz #tensions #disrupt #supplies<\/p>\n","protected":false},"excerpt":{"rendered":"
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