Beijing Hyundai Company, the South Korean automaker’s main vehicle assembly joint venture in China, is planning to cut its workforce as it struggles with significant overcapacity in the country according to local reports.
At its peak in 2016, before the political fallout between China and South Korea over the latter’s deployment of the US THAAD missile defence system, Hyundai sold over 1.6 million vehicles annually in China. Sales dropped dramatically following the subsequent government-orchestrated consumer boycott.
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Recent restructuring reduced Hyundai’s production capacity in China to just over 1 million vehicles across three main plants, with two plants located in Beijing and Chongqing sold to local automakers. The company’s Changzhou plant is expected to be sold in the next year, leaving Hyundai with just two plants in China.
Beijing Hyundai sold 257,000 sales last year, equivalent to just one quarter of its installed capacity, with volumes falling by a further 26% to 112,000 units in the first eight months of 2024.
Recent unsubstantiated reports suggested that Beijing Hyundai is preparing to cut 30% of its workforce, as part of a six-month long restructuring operation scheduled to be completed by February 2025.
The company has rejected these reports, stating “the 30% workforce layoff is not true” while pointing to its current efforts to lift exports of new energy vehicles (NEVs) – including electric and plug-in hybrid vehicles.
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