Hyundai Motor Cuts Output in South Korea After Sales Decline

Updated on

Hyundai Motor Co. and its affiliate Kia Motors Corp. are reducing production after sales fell at the two Korean carmakers.

Hyundai cut output at its Asan plant in South Korea by 25 percent on May 28 and 29, while Kia reduced working hours at its China business this month, the companies said in a joint e-mail on Friday. They didn’t provide further specifics on Kia’s reduction.

The Seoul-based automakers have posted declining vehicle sales as unfavorable currency-exchange rates undermine their ability to compete against the likes of Japan’s Toyota Motor Corp. Earlier this week, Hyundai and Kia said they were making efforts to cut costs after first-quarter operating profit declined.

“The production cuts are to flexibly adjust the plants’ production to market demand,” the companies said.

Hyundai fell 1.5 percent to 136,000 won at the close in Seoul trading. Kia was unchanged, while South Korea’s benchmark Kospi index declined 0.2 percent. Hyundai shares have dropped 20 percent this year, in contrast to the 7.1 percent gain in the Kospi.

A stronger won and a weaker yen have given Hyundai’s Japanese rivals a competitive edge in overseas markets. Last week, the Korean carmaker said domestic and overseas sales declined for a second consecutive month in May.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE