South Korea’s Hyundai Motor Co. is considering introducing a new factory idea for its major local plant aimed at better responding to rising market demand for diverse models with high quality.
According to automobile industry officials on Mar. 8, the top Korean automaker on Friday held a business briefing on its plan to introduce a multi-product batch production system to its third factory in Ulsan, southeast of Seoul.
The company is expected to adopt the system at the factory on a trial basis in early 2022 and have other local factories of Hyundai Motor and affiliate Kia Corp. equipped with the system afterwards.
The manufacturing method will allow the automotive group to produce between five and 10 different kinds of cars on a single assembly line by moving all components needed to make an individual car on a cart along with the car on the production line throughout the whole process.
The system is suitable for producing various types of cars on a single assembly line, eliminating the need to build additional plants if a new model is temporarily in high demand, according to Hyundai.
Under the current mass production system, the carmaker produces just one or two different types of cars on a single production line with the same auto parts heavily stacked behind the assembly conveyer belt.
GOOD FOR QUALITY CONTROL AT DIVERSE MODELS
As opposed to mass production where changes cannot be easily made, batch production is good for quality control, with problems fixed quickly.
“With diversified consumer requests, automakers need to build a multi-kind, small-quantity production system,” said an industry executive.
“Demand for eco-friendly cars such as electric vehicles and hydrogen-fueled cars as well as high-performance vehicles is steadily increasing. That makes it inevitable for carmakers to change their current production system sooner or later.”
Hyundai Motor's SUVs are rolling out under a mass-production system. Back in 2010, Hyundai Motor made 14 different models at its Ulsan plants. The number grew to 28 in 2020.
At the Ulsan third factory alone, the types of automobiles that Hyundai manufactures increased to nine in 2020 from four in 2010. Hyundai’s third Ulsan plant currently makes the Avante compact sedan, the small Venue SUV and the Hyundai i30 family car.
A number of leading global automakers such as General Motors Co., Toyota Motor Corp., Volkswagen AG and Porsche AG are already employing a similar multi-product, small-batch production system.
Hyundai Motor has also adopted such a system at its overseas plants, including those in the US, China and Brazil.
UNION OBJECTIONS
The automaker, however, hasn’t introduced the system to the production bases in Korea largely due to objections from its labor union.
Its unionized workers have opposed the system, saying that making several cars at one production line will add to employee workloads and could result in fewer assembly lines that may lead to job cuts.
With the inauguration of new labor leaders last year, however, the company is seeking to apply the production method to locally-produced cars as well.
Lee Sang-soo, Hyundai Motor’s new union leader, has said its union members will positively consider accepting a new manufacturing method if the change helps improve productivity.
Analysts agreed that the batch system will enhance Hyundai’s productivity at its local factories, but there could be some disadvantages because small batches usually need more planning, scheduling and careful control over the process.
Write to Byung-Uk Do at dodo@hankyung.com In-Soo Nam edited this article.
