South Korea's Hyundai Motor Co. said
Wednesday it will shut its auto plant in Alabama for 10 days during
the fourth quarter amid sluggish demand.
``We have decided to halt the U.S. plant for three days in
October and a combined seven days in November and December due to a
slowdown in sales,'' said Ki Jin-ho, a Hyundai Motor spokesman.
Hyundai's Montgomery, Ala., plant manufactures the mid-size
Sonata sedan and the Santa Fe sport utility vehicle. It was closed
on Oct. five and will be closed this Friday and Oct. 19, with the
remaining seven days yet to be scheduled, Ki said.
Ki didn't say how much the 10-day shutdown will cost the world's
sixth-largest carmaker by sales.
``We are taking a temporary measure to suit the U.S. market
conditions, like other carmakers which are also cutting down
production,'' he said.
Hyundai began producing vehicles at the factory in 2005.
John Kalson, vice-president of Hyundai Motor Manufacturing
Alabama LLC, said that Hyundai is encouraged by strong sales of the
Santa Fe, but said Sonata sales have fallen slightly.
``This adjustment in our production rate is temporary in nature,
although we remain subject to market forces and customer demand for
our products,'' Kalson said in a statement.
Analysts said sluggish demand for new cars in the U.S. following
the subprime mortgage crisis has led carmakers to curtail production
in the world's largest automobile market.
Hyundai, which is likely to introduce a new version of its Sonata
sedan in the U.S. early next year, needs to minimize its inventory
of current Sonata models this quarter, analysts said.
Jeff Lee at Hana Daetoo Securities in Seoul said he's optimistic
Hyundai's U.S. sales will improve next year as the company is
focusing on marketing to boost sales and plans to launch its new
Sonata in the first quarter of 2008.
If Hyundai sells 470,000 vehicles in the U.S. this year it will
be successful amid a slowdown in the world's economic powerhouse,
said Stephen Ahn, an analyst at Woori Investment & Securities Co.
Hyundai sold a total 455,520 vehicles in the U.S. last year,
accounting for 2.8 per cent of the market. In August, Hyundai
revised down its 2007 U.S. sales target to 510,000 vehicles from
In the January-September period, the carmaker sold 358,407
vehicles, compared with 359,259 sold in the same period a year