Hyundai Motor Company of South Korea and their affiliate Kia Motors corporation have said to be targeting a 4% increase in their global sales this year, to a combined 7.41,000,000 vehicles, which is actually their slowest sales growth for almost 10 years, since 2003.
Hyundai and Kia brace themselves for more modest growth
The manufacturing twosome, whose companies together rank fifth in car sales globally, are bracing themselves for a slightly more modest growth this coming year, after many years of expansion at a rather high speed. Chung Mong-Koo who is the Group Chairman decided to slow down capacity building in an effort to improve the quality of models and the brands, safeguarding the profitability of the company.
However, investors have growing concerns that growth will stall due to Hyundai and Kia’s strategy of going slow. Hyundai and Kia’s margins look to be threatened due to the strength of South Korean currency, which reduces earnings and pricing power. The Yen is softening, essentially tipping competitiveness in favour of Toyota Motor Corporation and Honda Motor Company, their Japanese Rivals.
The won (Japanese Money) actually rose by 7.6% against the dollar this previous year, allowing it’s biggest gain in percentage for 3 years, since 2009. This has been reflected in the fact that shares within Hyundai rose by 2.6% this previous year, though Kia’s shares actually decreased by 15.3%, which underperformed the wider markets. Hyundai and Kia are said to be the worst performing stocks from the Top Five Global automakers of the previous year.
Some figures for Hyundai and Kia?
With regards to beating targets the duo sold 7.12,000,000 vehicles this previous year, which is up 8% from 2012 and is actually better than the company’s original target of 7,000,000. Hyundai and Kia also drove up Sales within China when their Japanese Competition were hit by unforeseen circumstances of an argument over islands, within the East China Sea this previous year.
In the US and Canads, Hyundai and Kia’s sales have not yet been affected greatly, by the company’s admission that they had exaggerated the fuel economy of over 1,000,000 vehicles. Also, Hyundai which started brand new plants in Brazil and China this previous year, is actually in a better position this year to Increase company sales than Kia, as the company didn’t add any capacity at all this previous year. Lets hope these targets work this year for Hyundai and Kia.