Falling demand has forced South Korean car maker Hyundai Motor Company to cut its production in India from next week.

Speaking to media-persons after opening a new showroom here, Hyundai Motor India managing director H S Lheem said the first quarter sales in 2009 was likely to be weak and the demand is likely to pick up only during the second half.

He said the company would go for a two-shift production instead of three shifts.

The company is also planning to hike the prices of its models by at least two per cent next month due to the rising input costs.

"We are under a lot of pressure to increase prices. So far, we have absorbed all the input costs and also undertaken a cost reduction campaign. But may be we cannot absorb anymore," said Lheem.

Hyundai is India’s largest car exporter and second largest car manufacturer.