In the latest of China trade woes, Hyundai Motor announced that its Chinese JV will accept voluntary retirements following a sudden slump in car sales.
The world’s biggest car market recently saw the phasing out of tax cuts on small cars, along with tightening tariffs due to the trade stand-off with the United States.
Last week, a Reuters poll suggested that China’s economy might slow to 6.3% in 2019 due to weakening domestic demand. The US tariffs added to the Asian countries woes. This expected growth of the Chinese economy would be the lowest in 2018. The economy was touted to grow 6.6% in 2018, while it grew 6.9% in 2017.
The bleak Chinese economy outlook has lead to automakers like Nissan to cut production, and other such as Suzuki Motor to exit from the country.
Along with this, the diplomatic row between Seoul and Beijing further added to Hyundai’s problems.
Hyundai, which worked with Kia Motors, was the third largest automaker in the country till 2016. In the recent fourth quarter, Hyundai’s China sales slumped 23%.
An official company statement read, “Hyundai Motor is reviewing various optimization plans to enhance facility efficiency around the Chinese New Year holidays.”
Chinese fintech publication Caixin also reported that Hyundai’s local JV expects 1,500 spare working roles in the first quarter. According to reports, the company had told the staff to choose to stay or leave.
However, there has been no official statement from Hyundai regarding any possible layoffs or voluntary retirements.