Seoul: South Korea’s Hyundai Motor unveiled on Monday additional measures to cut output and save costs, including shorter working hours at a plant that manufactures its core Sonata and Grandeur sedan models.
Hyundai Motor and affiliate Kia Motors Corp, together ranked as the world’s No. 5 auto maker, said in a joint statement that the companies would “actively respond” to changing market conditions through flexible production schedules.
“Hyundai and Kia face difficulties with this year’s combined sales estimated at 4.2 million vehicles, down from an initially expected 4.8 million, and inventory for overseas sales reaching 1.06 million,” the statement said.
The automobile industry is suffering from sharply declining consumer demand worldwide and tighter auto financing.
Washington extended on Friday $17.4 billion emergency loans to aid troubled U.S. carmakers while Toyota Motor Corp slashed its annual outlook.
Since December, Hyundai and Kia have cut working hours including overtime work by an average four hours a day to reduce production amid weakening auto demand.
Starting this week, Hyundai is halving the working hours at its Asan plant to four hours per shift and will abolish one of two working shifts at its bus production line in Jeonju, according to the statement.
Hyundai and Kia will also freeze wages for managers, it said.
Hyundai was earlier this month reported as targeting 3.05 million vehicle sales in 2009, up from estimated 2.8 million this year. Kia reportedly targets 1.47 million vehicle sales for 2009.
The Korea Automobile Manufacturers Association forecast last week local auto makers would suffer a 5.6% fall in exports and a 8.7% drop in local sales in 2009.
Shares in Hyundai Motor rose 0.99% while Kia shares fell 3.08% on Monday, compared with the wider market’s 0.12% loss.