The cut will mostly affect larger vehicles, especially SUVs.

Hyundai plans to increase output of small cars as demand for fuel-efficient models remains strong, company spokesman Song Mee Young said.

Hyundai manufactured about 425,000 vehicles domestically during the first quarter last year, she said.

The decision was made on Friday as a result of a meeting between management and labour on the company's production schedule for the quarter, she said.

Hyundai, which along with affiliate Kia Motors Corp forms the world's fifth-largest automotive group, exports about 60 per cent of its domestic production.

Global automakers have slashed output to cope with a drop-off in demand as a result of the global financial crisis and ensuing economic slowdown.

Hyundai shares fell 3.3 per cent to close at 45,150 won on Monday. -- AP