Hyundai Motor India announced that a massive fire broke out on Sunday evening at the Hyundai Mobis facility in Sriperumbudur, near Chennai. According to latest reports, fire and rescue personnel brought the blaze under control after nearly four hours of firefighting operations. The fire reportedly originated in the scrap yard before spreading to two units, with no casualties reported. Hyundai Motor India announced that a fire incident occurred at one of the manufacturing facilities of the company's supplier Mobis India at Irrungattukottai, Kancheepuram District of Tamil Nadu in the late afternoon of 31 May 2026. In a regulatory filing on Monday, the country's second-largest passenger vehicle maker confirmed that the fire incident did not result in any loss of life.
The fire may disrupt Hyundai and Kia production for at least a week, with significant financial implications. For Hyundai's Sriperumbudur unit alone, a seven-day halt in production may lead to the loss of production of over 16,100 units, considering a daily production of around 2,300 units. At an average price of around ₹10 lakh, these products may well be valued at over ₹1,600 crore. However, the fire may not affect the sales of any of these companies, as Hyundai Motor is currently carrying inventory of up to one month at the dealers' end. A government source informed Business Standard that Mobis India would have suffered damage to the tune of around ₹20 crore, as one of its three units near the Hyundai Motor manufacturing facility was affected. At present, Hyundai's Talegaon unit is unlikely to be hit.
According to Business Standard reports, alternative sourcing and supply continuity measures are being actively explored to minimize the operational impact. The country's fourth-largest passenger vehicle maker by volume has confirmed that there is sufficient vehicle inventory in its dealer network to manage customer demand while the situation at the supplier's facility is being resolved. However, the situation is particularly concerning given that Mobis India is Hyundai Motor India's largest supplier, accounting for more than 16% of total parts and materials supplied, according to disclosures made during Hyundai Motor India's IPO. The company also noted that if Mobis is unable to provide parts for after-sale services, sales and after-sale services could be negatively affected. Hyundai Motor India is working closely with Mobis India Limited to restore normal supply chain operations through alternative sourcing initiatives, with sources indicating that alternative plans include bringing auto parts from South Korea and sourcing from the domestic market.
Despite the production disruption, Hyundai Motor India registered 9% year-on-year growth in its domestic sales, moving 47,837 units in May 2026. The company has also established a strategic partnership with Mobis, having leased a section of its Chennai manufacturing plant to Mobis for the assembly of electric vehicle batteries. This relationship extends beyond traditional supplier arrangements, with Mobis serving as the exclusive supplier of parts and accessories for the after-sales service of Hyundai passenger vehicles. The disruption comes just days after HMIL announced a price increase of up to ₹12,800 across its model range effective June 1, citing higher input costs, commodity inflation and rising operational expenses. Both Hyundai and Kia together contributed around 17 per cent of total passenger vehicle sales in India in April, highlighting the significance of this supply chain disruption for the Indian automotive market.
