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Hyundai Motor India Will Cut Some Contract Workers (Update1)
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By Vipin V. Nair and Seonjin Cha

Dec. 19 (Bloomberg) -- Hyundai Motor Co., South Korea's largest
automaker, will cut some temporary staff in India as the global
recession reduces demand for exports from the country and local
consumers put off car purchases.

The company may also cut production in India and exports could decline
25 percent in the first half of 2009, Rajiv Mitra, a spokesman of the
Indian unit, said in a phone interview today. Mitra declined to say
how many people will be laid off.

Seoul-based Hyundai joins Toyota Motor Corp., Nissan Motor Co. and
other global automakers in slashing temporary workers and curtailing
output as recession in Europe, Japan, and the U.S. hurts car sales.
Hyundai will cut 2,000 temporary workers in India, about 25 percent of
its total workforce in the country, the Business Standard daily
reported earlier today.

``Some people will be laid off,'' Mitra said. ``It won't be as high''
as reported. ``Not even half,'' he said.

Hyundai Motor, the second-biggest carmaker in India, employs 5,100
regular employees, and about 3,300 temporary workers in India, Mitra
said. The company produces the Santro and i10 minicars and the Sonata
sedan at its factory in the southern port city of Chennai.

Automakers are scaling back output in India also because the domestic
passenger-car sales dropped by the most in more than five years in
November. Maruti Suzuki India Ltd., the nation's biggest carmaker, has
said that its production this year will be below initial estimates.

Local Demand

Demand in Asia's fourth-largest automotive market has fallen in four
of the past five months as banks cut back on automotive loans and the
wider economic slowdown kept consumers away from showrooms.

Hyundai's India car sales fell 26 percent last month to 14,601 units,
according to the Society of Indian Automobile Manufacturers. That's
the first drop in more than two years, Mitra said.

Exports between April and November more than doubled to 175,800,
according to the Society's data. The company exported more cars from
India than it sold locally in the eight months.

``Overseas demand is falling,'' Mitra said. ``There is a lag of three
months in order taking and delivery. Orders have been down steadily
from the start of this month.''

To contact the reporters on the story: Vipin V. Nair in Mumbai at
Vnair12@bloomberg.net; Seonjin Cha in Seoul at scha2@bloomberg.net
Last Updated: December 18, 2008 22:56 EST

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