The strike at Yoosung Enterprize’s Asan plant in the South Chungcheong Province began last Wednesday, with production now stalled for a sixth day.
Yoosung is the major supplier of piston rings in South Korea, with the parts maker holding an 80 percent share of the domestic market.
Although the piston rings cost little more than $1 each, they are a vital part of the production process.
According to Korean reports, Hyundai and Kia source 70 percent of their piston rings from Yoosung, with Hyundai only hours away from running out of parts.
“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.
The Korea Times reported that production of the Kia Carnival came to a stop on Friday, while the assembly line producing the Hyundai ix35, Santa Fe and Veracruz (not sold in Australia) came to a halt on Sunday.
Hyundai Australia's Stephen Howard said the local branch was currently investigating the potential impact of the strike on Australian vehicle availability and delivery times.
"At this time it is not clear what impact this may have on production of cars in Korea being built for overseas markets. We will continue to closely monitor the situation."
A GM Korea spokesman told the Wall Street Journal around 50 percent of its piston rings were sourced from Yoosung.
“We have an inventory of the core engine part which will keep the two plants running through the coming week, but we are preparing for a worse-case scenario,” GM Korea’s Park Hae-ho said.
Renault Samsung and Ssangyong Motor also source engine parts from Yoosung but neither is expecting serious production disruptions.
Yoosung employees have been striking on and off since the beginning of the year over pay and shift time disagreements.
Police told Korean publication Chosunilbo that around 100 of the 500-700 people striking inside the Asan plant were not Yoosung workers, but people from outside trying to aggravate the situation.