Hyundai Ponders Capacity Cuts in China

Hyundai Motor Co. is weighing cuts in its production capacity in China because of declining sales, sources tell Reuters.

CEO Wonhee Lee made the comment during a meeting with analysts and investors, according to sources who attended the event. They say Lee described possible reductions in capacity at its older factories in China, along with a reduction in the workforce there.

Hyundai, whose sales in China plunged 23% in the final quarter of 2018, tells Reuters the company has begun a voluntary retirement program for workers in the country and is reviewing multiple plans to “enhance facility efficiency.”

Reuters’ sources say Lee noted that the global auto industry currently has the capacity to make 135 million vehicles per year compared with actual market demand of about 95 million units.