SOUTH KOREA: GM Daewoo output disrupted by tyre stoppage

GM Daewoo has said it has halted production after tyre supplies stopped.

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.

Source: http://www.just-auto.com/article.aspx?id=95463