SEOUL -- Hyundai Motor is considering making cuts to production in China and offering employees early retirement in a bid to lower costs as the world's biggest market for car sales reverses into decline after a 28-year growth run.
South Korea's top automaker, which on Thursday announced its first quarterly net loss since 2011 as a result of the Chinese slowdown, said it planned to reduce manufacturing in China to improve efficiency at its factories. Hyundai runs four factories in China -- three in Beijing and one in Hebei -- employing 16,000 employees. Caixin, the Chinese news outlet, reported that the company was seeking some 1,500 job cuts.
"We are considering adjusting our production around the Chinese New Year holidays to boost efficiency in operating factories," the company said in a statement. "We are running a voluntary retirement compensation program for employees."
The announcement comes as global carmakers are suffering the effects of a sharp reversal in Chinese auto sales. Last year sales fell by 4% to 23.8 million -- the first decline since 1990.
Hyundai, which holds 3% of the Chinese market, this week revealed that sales in China tumbled 17.5% to 221,000 units in the October-to-December period from a year earlier -- a big contrast to its domestic market, where sales jumped 14.7% to 195,000 units. Last year, its Chinese sales dropped 8.6% to 746,000 units.
The carmaker's Chinese factories produced 790,000 vehicles in 2018, up 0.7% from a year earlier, with production in the fourth quarter falling 22.5% to 229,000 units.
The company attributed the drops to the lingering trade tensions between Washington and Beijing as well as a slowing Chinese economy. Excluding China, Hyundai's global sales rose 3.2% to 973,000 vehicles in the fourth quarter of last year, from the same period a year earlier.
Hyundai said it would expand electric vehicle models in China to five from two to cope with rising demand for EVs and the Chinese authorities' policy to nurture the sector. The automaker is also aiming to boost its brand image to compete with Japanese brands, which are considered premium in the country.
"Eventually we want to become the global No. 3 in the EVs market," said Koo Zayong, a Hyundai executive, in a conference call on Thursday. "We will also produce 500,000 hydrogen cars by 2030 with $7 billion of investment."