Hyundai Motor stated its Chinese joint venture (JV) is accepting voluntary retirements and evaluating various “optimization plans” at its factories after a decline in car sales in the major market.
China saw its first auto sales contraction in over than two decades in last year as pressure from a crippling trade war with the United States and the phasing out of tax cuts on smaller cars pummeled business in the biggest car market.
A bleak outlook as the country’s economy slows has led many automakers, such as Nissan, to reduce production in the country or, as with Suzuki Motor, even exit it.
For Hyundai, troubles have been exacerbated as it is also just reviving from a diplomatic row between Seoul and Beijing that had affected demand for South Korean products in China.
Hyundai, which with its affiliate Kia Motors used to be the No.3 automaker in China until 2016, turned in sales that were only half of its overall production capacity last year.
“Hyundai Motor is reviewing various optimization plans to enhance facility efficiency around the Chinese New Year holidays,” it stated on Friday.
A spokeswoman for the automaker stated no decision had been made on the number of voluntary retirements.
Hyundai’s China sales sank 23 percent in the fourth quarter. There was a lack of attractive models and strong branding in the face of competition from both Chinese and global automakers.