UPDATE 1-Hyundai Motor November sales flat, hit by strike

* Hyundai Motor Nov sales up 1.4 pct from a year ago

* Hyundai considers factory shutdown as strike prolonged

* Kia monthly sales up 33 pct to hit record high
(Add monthly sales, analyst comments)

SEOUL, Dec 1 (BestGrowthStock) – Hyundai Motor (005380.KS: ) reported
the worst November sales among South Korean automakers on
Wednesday, as a prolonged strike at its biggest local production
base hit output and sales of its best-selling subcompact car.

But shares of Hyundai jumped nearly four percent as the
almost flat sales growth was better than most had feared,
although Hyundai warned on Wednesday that it was seriously
considering shutting down the affected plant in Ulsan due to a
strike by temporary workers.

Since Nov. 15, Hyundai’s subcontracted employees have
occupied the factory that produces subcompact cars such as the
Verna and the new Accent, demanding the automaker convert their
positions into permanent ones.

Labour unrest has often caused disruptions in Asia’s
fourth-largest economy, although Hyundai has avoided an annual
strike by regular workers this year for the second consecutive

South Korea’s auto industry typically faces strike action
every summer but they avoided such industrial action this year
amid the economic slowdown.

Hyundai said on Wednesday unionised workers also attempted to
occupy another plant in Ulsan, disrupting output, while temporary
workers at its Jeonju plant have also been waging a partial

The industrial action has caused a production loss of about
220 billion won ($190 million) so far, Hyundai said.

“The strike will not have a major impact on its revenue
because the affected plant produces (cheaper) subcompact models,
and the South Korean currency remains favourable,” Suh Sung-moon,
an analyst at Korea Investment & Securities, said.

Hyundai saw its total sales rise by 1.4 percent to 314,569
units in November from a year ago, but domestic sales slumped 13
percent, also partly due to the high base effect.

Hyundai has refused to negotiate in what it calls an illegal
strike and said a plant shutdown would slash affected regular
workers’ pay to 70 percent of normal levels.

Regular workers have not joined the strike yet and plan to
vote on Friday whether to join the temporary employees’
industrial action.

“It will be difficult for temporary workers to continue the
sit-in strike as regular workers oppose it, and Hyundai Motor is
getting tough with the strike,” said Lee Sang-hyun, an analyst at
NH Investment & Securities.

Kia (000270.KS: ), South Korea’s No.2 carmaker, saw its monthly
sales jump 33 percent to a record 222,116 units in November,
helped by strong sales of new models such as K5 sedan and
Sportage R SUV.

Growing concerns over European debt crisis may hit overseas
sales in the coming months but Korean automakers are set to
outperform the market, driven by new models, competitiveness in
compact cars and a weak local currency, analyst say.

“Auto demand is expected to contract in Europe next year as
the euro zone fiscal crisis persists. But Hyundai and Kia plan to
launch a series of new cars next year and that will help them
outperform the market,” Lee at NH said.
($1=1155.7 Won)
(Reporting by Hyunjoo Jin; Editing by Jacqueline Wong)

UPDATE 1-Hyundai Motor November sales flat, hit by strike