Stellantis to cut employees in Korea amid weakening sales

Industry

Published: 17 Oct. 2023, 14:58 Updated: 17 Oct. 2023, 15:35

Stellantis to cut employees in Korea amid weakening sales

Jake Aumann, managing director of Stellantis Korea, speaks about its business strategies during an online press conference last year. [STELLANTIS KOREA]

Stellantis is offering voluntary separation packages to its salaried employees in Korea as an attempt to tackle its weakening business in the local market.

The automaker said Tuesday it is offering a voluntary redundancy program for its employees in Korea, though it declined to confirm the specific planned number of job reductions.

“It is a decision made considering the situation in the long term and for us to respond to the market actively,” said a spokeswoman for Stellantis Korea.

Stellantis currently has around 100 salaried employees in Korea. It sells three brands in the Korean market: Jeep, Peugeot and DS.

The decision came as Stellantis has been struggling with the sluggish sales of vehicles in Korea in recent years.

Only 3,400 Jeeps were newly registered in Korea this year through the end of September, down 35 percent compared to the same period a year earlier, according to data from market tracker CarIsYou.

The number of newly registered Peugeot cars was 1,347.

Peugeot 408 crossover [STELLANTIS KOREA]

Peugeot sales in Korea have been on a constant decline since 2019 when a total of 3,505 units were sold. It fell to 2,611 in 2020, 2,320 in 2021 and 1,965 last year.

Stellantis has also cut the sticker prices of its most popular models in Korea, a rare move for auto brands that normally just offer a one-shot promotional event to boost sales.

Peugeot cut the price of its 3008 SUV by 3.3 million won ($2,440), while Jeep cut the price of its cheapest Grand Cherokee by 8.6 million won.

But the voluntary buyout program is nothing surprising as Stellantis CEO Carlos Tavares said the automaker is in a “brutal scenario” to “compete with Chinese rivals which are 25 percent less expensive" in July.

In April, Stellantis offered voluntary buyouts to 33,500 U.S. employees, citing plans to streamline operations.

Stellantis is currently building a $2.5 billion joint battery plant with Samsung SDI in Kokomo, Indiana. The two recently announced an additional $4 billion investment to build a second factory near the plant.