Demand declines in India, Hyundai looks at job cuts

With the global slowdown showing its frightening face Korean car maker Hyundai is planning to issue the pink slips to a handful of temporary staff in India.

The new move is said to be a fall out of the steep fall in exports as well as domestic demand.

According to sources in the industry, Hyundai will cut as many as 2,000 temporary workers in India. This in fact is about 25 percent of its total workforce in the country. The new plan brings Hyundai on the same state as of Toyota Motor Corp, Nissan Motor Co and other global automakers who have been sending off temporary workers and curtailing output as recession in Europe, Japan, and the US has begun to dent sales. Meanwhile, the company has reportedly informed that though some people will be laid off, the numbers won’t be as high as feared.

Hyundai Motor India, which has already climbed on to a position as the second-largest carmaker in the country, currently employs as many as 5,100 regular employees and about 3,300 temporary workers. Most of them are employed at the company’s Chennai manufacturing facility where small cars Santro and i10 as well as the Sonata sedan are made.

Apart from the staff cut plans, the company is also likely to slice production in India. This could in a way mean that exports could decline 25 percent in the first half of 2009.

Hyundai India had posted decline in sales up to 26 percent last month to 14,601 units. Significantly, that’s the first drop in sales at the company for more than two years. Meanwhile, exports between April and November had more than doubled to 175,800. The company, in fact, had exported more cars from India than it sold in the domestic market during the eight month period. However, it is being noted that, at the moment, overseas demand is falling and there has been a lag of three months in order taking and delivery.