MUMBAI (Reuters) - South Korean car maker Hyundai Motor Co.’s India unit will cut production by a quarter from Monday as a spreading global downturn bites its sales, a senior executive said on Friday.

Hyundai, the No.2 car maker in India and home to a small car hub, expects to sell just 490,000 cars including exports, compared with a target of 530,000, in 2008 as the industry grapples with falling sales and tighter credit, H.S. Lheem, managing director of Hyundai Motor India, said.
“We have decided to go in for a two-shift production instead of three shifts now as demand has declined,” he told reporters after opening a new showroom in Mumbai.
“We have an ambitious sales target for 2009 and we will try our best to reach it. But I cannot put a figure to it because all around conditions are changing everyday.”
Last week the company said it saw exports falling by 25 percent in 2009. It exports to about 95 countries with the bulk of the shipments going to Europe.
Earlier this month, Hyundai Motor said it was cutting output in most of its factories due to falling sales.
Lheem said sales would be weak in the March quarter, but demand could pick up in the second half when stability is seen returning to markets and lower interest rates lure buyers back.
Car sales have been slipping over the last few months in India with November witnessing a 20 percent drop, the worst in eight years, data from the Society of Indian Automobile Manufacturers showed.
Despite falling sales, Lheem said, Hyundai may be forced to nudge up price by 2 percent early next year as prices of raw materials, such as long-term contracts for steel have shot up.
“We are under a lot of pressure to increase prices. So far we have absorbed all the input costs and also undertaken cost reduction campaign. But maybe we cannot absorb any more,” he said.