Hyundai, Kia Delay Payments to Managers
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⌕ CEO of research & development division of Hyundai-Kia Motors Lee Hyun-soon, Kia Motors' president for overseas business Chung Eui-sun and vice chairman and CEO of Kia Motors Kim Ik-hwanAlthough it initially seemed like Japanese companies were less involved into what seems to be the toughest period in the history of the global automotive industry, the financial recession now starts making its presence felt in Asian markets, too. After Honda threatened the government that it may move its operations to overseas facilities, the Hyundai and Kia alliance announced their plans to cut the 2008 sales forecast by 12.5 percent and confirmed the company's intentions to delay payments to managers.
The reason for all these measure is nothing else than the over-discussed economic crisis which reduced demand for new cars on most emerging markets. According to The Detroit News, the group is now expecting sales of approximately 4.2 million vehicles by the end of the year, 600,000 units less than the initial forecast. Overseas inventories are expected to reach 1.06 million vehicles, the aforementioned source added quoting a Hyundai Kia report.
On the other hand, both Hyundai and Kia had an impressive expansion in overseas markets, with new production facilities built in several new countries. Hyundai currently owns factories in Czech Republic, Turkey, China, India and the United States while Kia has only two plans in China and Slovakia. A new production facility is currently under construction near Hyundai's Alababama plant.
The two automakers are also considering a bunch of new cost-cutting measures aimed at reducing loses caused by the recession, including the aforementioned lowered production plus reducing the working hours at two separate plants, The Detroit News added quoting the same report. Although the companies did not mention the production sites affected by these measure, one of these are responsible for manufacturing buses, the source added.
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