GM Daewoo halts car output on tyre supply stoppage

SEOUL, July 18 (Reuters) - Unlisted GM Daewoo Automotive and Technology Co, South Korea’s No.3 auto maker, said on Friday it halted production at its plant after South Korean tyre makers stopped supplies.

GM Daewoo, a unit of General Motors GM.N, said in a statement its Bupyeong manufacturing facility had suspended vehicle output from Friday afternoon after Hankook Tire 000240.KS and Kumho Tire 073240.KS decided not to supply to GM Daewoo.

Hankook Tire and Kumho Tire are asking for an increase in tyre prices. Those tyre makers account for more than 85 percent of tires on GM Daewoo’s vehicles.

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 by telephone.

He added Hankook stopped delivering tyres for two GM car models, including small-sized car Gentra.

Kumho was not available for comment.

GM Daewoo has three car factories and one engine plant in South Korea.

Reporting by Park Ju-min; Editing by Marie-France Han and Keiron Henderson