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South Korean Strikes May Cause Hyundai To Miss Sales Targets

August 30, 2012
2 min to read


SEOUL - According to a report on Reuters, Hyundai Motor may miss its overseas sales target next month because of strikes at its South Korean plants, said a company executive with direct knowledge of the sales.


Workers at Hyundai's South Korean factories, which produce nearly half of its vehicles sold globally, launched a series of partial strikes and refused to do overtime for five days last month and 21 days in August. The walkouts were the first strikes to hit the company in four years. Hyundai may also miss its sales target for its home market in August, said the company executive, who declined to be identified because he was not authorised to speak to the media. The South Korean market accounts for around 15 percent of Hyundai's total sales.

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But on an annual basis, Hyundai, along with its affiliate Kia Motors, will be able to meet its 2012 sales goal because they can make up lost production with extra work later this year, the company executive said.


"The strike will lead to temporary drops in sales in August and September, although on an annual basis, the sales are expected to be fine," the company executive said, without quantifying the size of the potential declines.


The executive did not disclose the domestic or overseas sales targets for August and September. The company only issues annual targets.


The strikes have resulted in lost production of 74,618 vehicles worth 1.55 trillion Korean won ($1.36 billion) as of Tuesday. The last time there was significant strike action at Hyundai was in 2006 and lost production then cost the company 1.64 trillion won. Hyundai's union will stage another partial strike on Wednesday alongside another round of wage talks with the management.


Hyundai said earlier that its vehicle exports to the United States fell 25 percent in July from the previous month because of strikes at its South Korean factories. "(Hyundai Motor) is short of inventory while Japanese automakers have enough inventory," the source said.

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