SsangYong will halt factory lines for 4 daysSsangYong Motor is partially suspending operations as the automaker struggles with a mounting inventory and slowing sales.
SsangYong Motor said Monday in a regulatory filing that management and labor agreed to halt operations for four days this month at its plant in Pyeongtaek, Gyeonggi.
“Due to the slowing local economy in the second quarter, we have used measures such as partial operational halts of one or two hours,” explained a SsangYong Motor spokesperson on Tuesday. “We requested the union [for the suspension] as inventory continued to pile up.
“This is the first time that the plant will shut down through agreement between labor and management,” he added.
SsangYong will suspend operations on July 5, 8, 12 and 15. Workers will receive 70 percent of their wages for those days.
The Pyeongtaek plant is SsangYong’s only auto factory in the country.
The spokesperson explained that the plant’s vehicle inventory has surpassed 5,000 units compared to a normal level of 4,500 units.
SsangYong’s decision comes as the automaker - a subsidiary of India’s Mahindra & Mahindra - faces difficulties.
The company saw its ninth-consecutive quarterly operating loss in the first quarter of this year.
Although sales from January through June rose 4.7 percent from the same period a year earlier, sales in June fell 17.5 percent compared to a year earlier.
The automaker maintained monthly sales of around 12,000 units this year, but June sales were only 10,375. Domestic sales last month fell 15.1 percent, while exports declined 25.5 percent.
The company is hoping for a rebound in sales in the second half of the year thanks to its popular Tivoli compact sport utility vehicle (SUV).
“We will increase our global sales by conducting diversified marketing activities and launching new cars in more export markets,” said Yea Byung-tae, SsangYong Motor CEO, in a statement Monday.
The broader auto industry also suffered declines last month with Korea’s five carmakers posting an 8.8-percent on-year decline in sales in unit terms.
SsangYong Motor shares fell 4.04 percent on Tuesday.
BY CHAE YUN-HWAN [email@example.com]
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