(May 23, 2011) South Korea's Hyundai Motor and its affiliate Kia Motors said Sunday they have suffered from a production disruption of some of its SUV models after a labor strike at one of its suppliers led to a parts shortage.

Hyundai, the world's fifth-biggest carmaker along with Kia Motors, warned that a protracted supply disruption could deal a blow at a time when Japanese rivals are resuming full production after the March 11 earthquake.

The parts supplier, Yoosung Enterprise Co., stopped production from May 18, after labor members occupied production lines over disagreements on new wage and shift systems, Hyundai said in a statement. Yoosung provides key engine parts to Hyundai, Kia, the Korean units of General Motors, Renault SA and Ssangyong Motor .

Around 70 percent of the piston rings used in popular models produced by the two firms such as Sonata sedan and the Santa Fe and Sportage SUVs come from the supplier.

It was unclear Sunday how the disruption may affect exports to the United States.

"Hyundai Motor America is in close contact with Hyundai Motor Company concerning the supplier strike in Korea," the U.S.-based unit said in a statement Sunday. "At this time it is not clear what impact this may have on production of cars being built for the U.S. market in Korea. We will continue to closely monitor the situation."

Hyundai Motor America spokesman Chris Hosford said he did not have information about specific U.S.-exported vehicles that could be affected.

"Our engine inventory will start to dry up on May 24, after which a production disruption will be inevitable for all of our passenger and commercial vehicles except for some small models...," Hyundai said in a statement earlier Sunday from South Korea.

The extent of the impact to Hyundai's U.S. manufacturing operations also remains unclear. About 77 percent of Hyundai's year-to-date U.S. sales through April were built in the United States, while the rest were assembled in Korea.

Source: Reuters