AP Photo/Lee Jin-man, File
- Kia and Hyundai see 4% sales growth in 2018.
The two automakers expect to sell 7.55 milion vehicles
this year, up from 7.25 million in 2017.
- Sales fell 7% last year.
(Reuters) – South Korea’s Hyundai Motor and Kia Motors on Tuesday
flagged 4 percent sales growth in 2018, suggesting a slow
recovery from a slump linked to their lack of SUVs in the United
States and diplomatic tensions with China.
Hyundai and smaller affiliate Kia said demand was expected to
soften in the U.S. and Chinese markets as they unveiled a
combined sales target of 7.55 million vehicles this year, from
7.25 million vehicles last year.
“The market environment is expected to be difficult due to a
slowdown in major markets like the U.S. and China, prolonged low
growth in the global economy and trade protectionism in major
countries,” Hyundai Motor said in a statement.
Sales slumped 7 percent last year from 2016, falling well short
of the firms’ target of 8.25 million vehicles and marking their
third consecutive annual miss, as buyers in China and the United
States increasingly shunned sedans for SUVs.
A diplomatic row between China and South Korea over Seoul’s
deployment of a U.S. missile defence system also hit the
carmakers’ sales in the world’s biggest auto market, although two
countries recently agreed to normalise ties.
“This year’s target for Hyundai and Kia is lower than expected.
It seems to be a conservative target, reflecting a slow recovery
in China and ongoing U.S difficulties,” Kim Jin-woo, an analyst
at Korea Investment & Securities said.
Hyundai Motor shares ended down 4.2 percent on Tuesday, and Kia
Motors stocks finished 2.1 percent lower. The broader market rose
The grim outlook came as the Korean won strengthened to a more
than three-year high against the dollar on Tuesday, threatening
the competitiveness of South Korean exporters as their Japanese
rivals benefit from the weakening yen.
The expiration of a tax cut on small-engine cars in China also
would be a negative for Hyundai’s sedan-heavy line-up, they said.
While Hyundai Motor has plans to offer more SUVs in the United
States and China this year, analysts said new models such as the
redesigned Santa Fe SUV may come too late in the year to
significantly impact sales.
Hyundai Motor Group chairman Chung Mong-koo said in a statement
it would “actively venture into” new markets like Southeast Asia,
as protectionism was expected to grow elsewhere.
South Korea and the United States will hold talks on a trade deal
on Jan. 5 although U.S. President Donald Trump has threatened to
withdraw from the pact.
Chung, 79, skipped his annual New Year speech to employees for a
second year in a row. He has not made any public appearances
since December, 2016. (Reporting Hyunjoo Jin and Joyce Lee;
Editing by Stephen Coates)