Hyundai to lay off Chinese workers in wake of disappointing fourth-quarter sales
South Korean car maker Hyundai has announced it is cutting jobs in China, after it reported a slump in quarterly sales in the country yesterday.
“Hyundai Motor is reviewing various optimisation plans to enhance facility efficiency around the Chinese New Year holidays,” it said in a statement on Friday.
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It is unclear how many people the car manufacturing giant is planning to lay off, but the news comes after yesterday’s announcement sales in China fell 23 per cent in the last three months of last year.
Hyundai, along with its joint venture partner in the region Kia, sold only 790,000 cars against its target of 900,000, only just above its six-year low of 785,000 in 2017, the year Korea’s diplomatic row with Beijing hampered business via poor consumer sentiment. Hyundai’s capacity for Chinese vehicle manufacturing is 1.65m annually.
Chinese financial magazine Caixin said the joint venture expects 1,500 surplus workers in the first quarter, and has asked staff to choose to stay or leave.
“We are agonising over how to improve our competitiveness in China. It is a very tough situation, but we are trying to turn around China operations next year,” a source told Reuters.
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The company is struggling with overcapacity as well as weakness in its China market, missing its target for sales in the country and reaching only half of its production capacity over the course of the year.
Hyundai reported losses of 129.8bn won (£88m) for the quarter ending 31 December, while operating profit fell 25 per cent to 501bn won.