Hyundai Motor Co and Kia Motors Corp may be the largest automakers in South Korea but they remain somewhat lesser known on the international markets. Of course, that is changing and their initially lower-priced models have been making their mark in an increasingly unstable global economy.
But both companies now expect sales will climb more than 4.5 percent this year as they plan to introduce new models as a means to counter even more fierce competition and global insecurity.
Indeed, Hyundai and Kia have both announced a combined target of delivering 8.25 million new vehicles in 2017. This is notably more than what they were able to deliver, combined, in 2016 (7.88 million units). This number falls right in line with what five industry analysts estimated: Hyundai expects to do about 5.08 million of these units, while Kia anticipates to do about 3.17 million units.
“Amid slowing global economic growth, uncertainties are rising more than ever as trade protectionism spreads and competition intensifies in the auto industry,” explains Hyundai Motor Group Chairman Chung Mong-koo, who also urged “swift and flexible” responses to the growing uncertain global business environment.
More importantly, then, the two companies can estimate this growth thanks to new manufacturing plants in China and Mexico. This, they say, is from whence they will be able to raise output; and how they will be able to introduce new models to their existing catalog. This includes a new sport utility vehicle aimed specifically at attracting new buyers.
Chung Mong-Koo goes on to say, “With the global economy continuing its low growth, trade protectionism spreading and competition intensifying in the automobile industry, uncertainty is growing more than ever.”
Furthermore, Hyundai Motors has seen its fourth straight annual decline in profits. Higher exposure to weak emerging international markets and an outdated product catalog (more sedans than SUVs, hence the new model) continues to put pressure on the company.
As such, shares of Hyundai Motor fell for the third straight year, now down 2 percent versus the much wider market’s upswing of 3 percent. More dramatically, shares in Kia Motors fell 25 percent over the last year (which actually makes them the worst-performing stock of all major international car makers).