Hyundai Motor Going through Multiple Challenges

It has been found that the top management of Hyundai Motor Company decided on October 13 to drop 13 lawsuits for seizure and compensation for damages against employees as the return for the wage agreement, in which 17 labor union members and 5.145 billion won were involved. A strike is currently underway in this company and its losses attributable to the strike are estimated to exceed three trillion won.

At this moment, Hyundai Motor Company is going through the biggest crisis in years as its productivity and operating profit are on the decline due to extremely rigid labor relations. The automaker is showing more and more problems in terms of quality control to boot.

Hyundai Motor Company’s total sales volume is estimated to be less than eight million vehicles this year. For the first nine months of this year, it sold a total of 5,621,910 cars in and out of South Korea, down 1.8% from a year ago. If the current pace continues, the company is likely to post a negative annual growth for the first time in 18 years. Its operating profit-to-sales ratio dropped from 10.3% to 6.6% between 2011 and the first half of this year. Besides, the strike is negatively affecting its plan for the release of new models such as the New Grandeur.