GM Daewoo has said it has halted production after tyre supplies stopped.
Go deeper with GlobalData
The company said in a statement its Bupyeong manufacturing facility had suspended vehicle output from Friday afternoon after Hankook Tire and Kumho Tire decided not to supply to GM Daewoo.
Hankook Tire and Kumho Tire are asking for an increase in tyre prices and account for more than 85% of tyres on GM Daewoo’s vehicles.
Reuters reported that an industry source said that GM had agreed to a price increase in March but would not accept the tyre makers’ request for a subsequent price increase.
Hankook Tire said it would not resume its supplies until GM Daewoo showed its intention to make a deal.
“We are asking for a 12 percent hike in tyre prices due to rising raw materials costs. But GM Daewoo refuses to negotiate and told us to withdraw the request,” a spokesman of Hankook Tire told Reuters.
He added Hankook stopped delivering tyres for two GM car models, including small-sized car Gentra.
