Hyundai Motors India Ltd, the country's largest auto exporter and the second largest car manufacturer, will cut production and lay off 2,000 temporary workers, about one-fourth of its labour force, to tide over a continuing slump in car sales.

Korea-based Hyundai Motors said the lay-offs, one of the largest in the domestic automobile industry in recent months, will come in stages beginning January.

Hyundai will also reduce the number of shifts in its two units near Chennai, from five to four and to even three shifts in January – the company ran six shifts six months ago to cope up with demand.

The company is scaling down production on the back of projections that exports, which account for the a third of the company's revenues, will fall 25 per cent in 2009.

Hyundai India, which manufactures about 250 cars every shift and 1,600 to 1,800 cars a day, employs over 8,400 workers in India, of which around 3,300 are temporary.

Hyundai India saw its exports rise in December as well, but the orders were placed three months ago when the meltdown had just begun. But domestic car sales declined 23.57 per cent in November when it sold only 14,605 cars. Hyundai  India also saw its inventory pile up for over 35 days against the normal 2-3 weeks time.

The Korean major has seen its sales grow 19.52 per cent to over 161,493 units between April-November, buoyed by brisk sales of the i10 model. The car maker is betting on the January launch of its small car model, the i20, to bolster domestic sales.

Hyundai Motor India, meanwhile, received the 'Niryat Shree' silver trophy for the year 2005-06 at a function organised by the Federation of Indian Export Organisations (FIEO). The award was conferred on Hyundai for outstanding performance in export in the engineering and metallurgical products under the non-SSI category.

Hyundai received the EEPC 'Top Exporter of the Year' award for the year 2005-06. HMIL accounts for roughly 67 per cent of the car exports from India.

A Hyundai spokesperson said the company "as of now" has no plans to lay off any employee.