South Korea's Hyundai Motor plans to step up its cost-saving measures as it looks to post its fourth consecutive year of earnings decline, according to local reports citing Reuters.
The brand's global sales were almost 2% lower in the first eleven months of last year, reflecting weak demand in key emerging/developing markets around the world. Company officials have also acknowledged the brand's weak exposure to booming global SUV demand.
Hyundai officials said business-class flights and hotel expenses will be scaled back significantly, as will overall business travel with the company set to make more extensive use of video-conferencing. Overseas employees will also lose some of their annual travel allowances.
Cost-cutting will be extended to day-to-day office and factory supply expenses, including printing, while the company addresses the longer term task of rebalancing its product portfolio in line with global demand.
The company's executives have also taken a 10% pay-cut since October, the first time this has happened in seven years.
Hyundai-Kia's executive vice-president, Park Hong-jae, said he expects global sales to recover next year after a difficult 2016, helped by recovering demand in Russia and Brazil and additional capacity in China and Mexico.
The group's 2017 sales target has been lowered to 8.2 million units, however, from 8.35 million forecast just six months ago.
Hyundai will also offer a stronger SUV line-up next year and a revamped Sonata sedan, and will focus its efforts more on high-demand markets such as North America. A new sub-compact SUV model, codenamed "OS", is expected to go into production in South Korea for sale domestically and for export to Europe and North America.