Breaking News
0

Hyundai, Kia target sales rebound after first fall in 18 years

Stock MarketsJan 02, 2017 02:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Hyundai Motor Group Vice Chairman Yoon Yeo-chul speaks during the company's New Year ceremony in Seoul

By Hyunjoo Jin and Se Young Lee

SEOUL (Reuters) - Hyundai Motor (KS:005830) and affiliate Kia Motors (KS:000270) on Monday forecast global sales to rebound in 2017 by a stronger-than-expected 5 percent, after posting their first annual sales fall in nearly two decades last year.

Sales could get a lift this year with emerging markets such as Russia stabilizing, and with Hyundai and Kia Motors gearing up to boost supply to the United States and China, analysts said.

But margins could come under pressure as the South Korean duo - which together rank fifth in global sales - plan to add capacity in China and Mexico, just as many analysts expect those markets and the United States to slow.

"With the global economy continuing its low growth, trade protectionism spreading and competition intensifying in the automobile industry, uncertainty is growing more than ever," Hyundai Motor Group Chairman Chung Mong-koo said in his New Year message to employees.

The 78-year-old chief said the automakers will launch more than 10 new models every year, including a new SUV for advanced markets and a Genesis G70 sedan this year.

The projected 5 percent rise in global sales for 2017 to 8.25 million vehicles easily beats the 1.9 percent rise forecast earlier by Hyundai Motor Group's own think-tank.

"The 2017 goal is slightly higher than my projection," said Ko Tae-bong, an auto analyst at Hi Investment & Securities.

RISING COMPETITION

Hyundai Motor likely clocked its fourth straight annual profit decline in 2016. Sales were hit by its sedan-heavy line-up, which meant it missed a boom in SUV demand, and sluggish emerging markets.

Hyundai Motor sold 4.86 million vehicles compared with its target of 5.01 million last year. Kia Motors sold 3.02 million vehicles, shy of its goal of 3.12 million.

Hyundai Motor is now targeting 2017 global sales of 5.08 million vehicles, while its smaller affiliate set its goal at 3.17 million vehicles.

Kia Motors Vice Chairman Lee Hyong-keun warned of tough competition in the year ahead.

"Rivals are expected to launch a full-blown assault based on their cost competitiveness," he said in a speech to employees.

Hyundai Motor shares ended up 2.7 percent on Monday and Kia Motors stocks were up 0.6 percent in a flat wider market (KS11).

Hyundai Motor shares fell for a third straight year in 2016, down 2 percent, while Kia Motors was the worst-performing stock among major car makers with a 25 percent slump.

Executives paid the price for Hyundai Motor's rough year. The automaker's top U.S. executive resigned and the South Korea sales chief and China head were replaced.

Hyundai, Kia target sales rebound after first fall in 18 years
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email