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Stellantis Korea is introducing a voluntary redundancy program, signaling its ongoing struggle to adapt to fast-changing market conditions in Korea's competitive automotive sector.
Market Challenges and Restructuring
Due to rapid changes in market conditions, Stellantis Korea has recently undergone organizational and workforce restructuring. Despite these efforts, sluggish sales in the Korean market have significantly prompted this decision.
According to local car market tracker Car Is You, the number of newly registered Jeeps in Korea during the third quarter decreased by 35 percent year-on-year, reports Korea Times. On the other hand, Toyota vehicles saw a surge in newly registered units during the same period.
Insufficient Impact of Price Cuts
In response to the market challenges, Stellantis Korea has implemented various strategies to address the issue. One such strategy involved reducing the price of the Peugeot 3008 SUV and the Jeep Grand Cherokee Limited SUV in the Korean market.
Unfortunately, the price reductions did not yield the desired impact and failed to prevent the forthcoming reduction in workforce at Stellantis Korea.
Stellantis Korea has not disclosed the exact number of employees to be laid off or the compensation details. However, it is reported that departing employees will receive a payout equivalent to several months of their salaries.
International Workforce Reductions
Stellantis' headquarters has also implemented employee layoffs in other countries. In April, the company offered voluntary buyouts to 33,500 employees in the United States as part of their efforts to streamline operations.
Stellantis, which in July agreed to add a battery plant with Samsung with an annual production capacity of 34 gigawatt hours (GWh) in the US, as per KED Global, faces fierce competition, particularly from Chinese rivals who offer vehicles at a 25 percent lower price. This, combined with the additional costs associated with the electrification of cars, paints a challenging picture for the company.
Stellantis Korea's voluntary redundancy program highlights the company's determination to navigate the challenging business environment. Only time will tell if these measures will prove successful as they continue to restructure and address market demands.
Photo: Stellantis Korea
