According to foreign media reports, an executive of General Motors South Korea told Reuters that it has suspended production at two of its factories in South Korea after a local supplier refused to supply auto parts in order to increase prices.

It is reported that ERAE AMS, a Korean auto generator, caliper, brake and other parts supplier, has asked to raise its product prices and refused to provide parts to GM's Korean auto plant. GM's Changwon plant and Bupyeong No. 2 plant in South Korea have suspended production of all vehicles since last week.

GM's Bupyeong plant in Korea (Image credit: GM)

"We plan to continue negotiations with ERAE AMS to resolve the issue," GM Korea said in a statement. ERAE AMS did not immediately comment on the report. ERAE AMS has production sites in South Korea, China and the United States, supplying major automakers including Volkswagen, Hyundai and BYD.

According to data from the Korea Automobile Manufacturers Association, the combined annual production capacity of GM’s Changwon plant and Bupyeong No. 2 plant is about 70,000 vehicles, accounting for about 30% of GM’s total production capacity in Korea last year. GM Korea said its Bupyeong No. 1 plant, which makes the Trailblazer SUV, is not currently affected.

The shutdown of GM's two factories in South Korea may be a blow to the company. Earlier, Roberto Rempel, president of GM Korea, had announced that the company's goal was to break even this year and be profitable by next year. GM Korea Motors has lost money for eight straight years since 2014, according to regulatory filings.