For its full year, Hyundai Motors sees a flat sales growth. Hyundai Motor faces overcapacity at its Chinese plants.
Following a slump in its car sales in China, Hyundai Motor stated, its Chinese joint venture is accepting voluntary retirements from employees and reviewing various “optimization plans” at its factories China.
For the first time in more than 2 decades, the Chinese auto market witnessed a contraction possibly due to pressures from the blistering U.S.-China trade war as well as the phasing out of tax cuts on smaller cars.
The trade wars pressures had piled on top on earlier diplomatic rumbles between Seoul and Beijing which had reduced demand for Korean products in China.
Until 2016, Hyundai, with its affiliate Kia Motors, was the third-biggest automaker in China. It is now saddled with overcapacity. Its 2018 China sales touched barely 50% of its total production capacity.
“Hyundai Motor is reviewing various optimization plans to enhance facility efficiency around the Chinese New Year Holidays,” said Hyundai in a statement.
According to Caixin, a Chinese financial magazine, Kia Motors expects 1,500 spare working roles for the first quarter of this year; it has asked staff to either choose to stay or to be laid off, reported Caixin citing an internal document.
Hyundai’s China sales fell by 23% during the fourth quarter.
For the full year, Hyundai’s sales stayed nearly flat at 790,000 vehicles in China from a year earlier, compared with its total capacity of 1.65 million vehicles.