Kia Halts Ray, Morning Production After Supplier Fire

Kia (000270.KS) will shut down the factory producing its Ray and Morning models after a fire at auto parts supplier Anjeon Engineering disrupted engine supply. This marks the first case of a supplier fire causing disruptions to finished vehicle production.

Donghee Auto, a contract manufacturer for Kia, will suspend operations at its Seosan plant from April 1 through April 11, according to auto industry sources on Wednesday.

Donghee Auto said it will pay workers 100% of their regular wages during the shutdown period. Employees needed for construction, facility maintenance, modifications and shipping operations will report to work as normal. The company said it will separately negotiate the resumption of production line operations from April 13, taking engine supply conditions into account.

Donghee Auto is a joint venture between Kia and auto parts manufacturer Donghee Holdings, and currently handles all contract production of the Morning and Ray models. The plant suspension was triggered by engine supply difficulties stemming from the Anjeon Engineering fire. Donghee Auto sources its engines from Hyundai Wia, which has been scaling back engine supply volumes due to the Anjeon Engineering factory fire, prompting the preemptive decision to halt plant operations.

Founded in 1953, Anjeon Engineering is a key supplier of engine valves to Hyundai Motor (005380.KS) and Kia. The company recorded revenue of 135.1 billion won ($99 million) in 2024, comprising 27.1 billion won in domestic sales and 108 billion won in exports. Anjeon Engineering also localized hollow valves for hybrid vehicles, generating over 100 billion won in annual exports. As a core supplier producing more than 70 million engine valves annually, the fire has raised significant concerns about potential disruptions to finished vehicle production at Hyundai Motor and Kia.