Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. logged lower-than-expected sales during the first four months of this year, raising worries that they might not be able to achieve their annual sales targets for this year.
Hyundai Motor, South Korea’s leading automaker, earlier aimed to sell 5.05 million cars this year, while No. 2 Kia Motors targeted 3.15 million units. The two pushed to sell a combined 8.2 million units, up 195,000 from last year.
Sales figures so far this year, however, have dimmed their target-beating prospects.
During the January-April period, Hyundai Motor said it sold a cumulative 1.62 million cars, down 2.9 percent from a year earlier.
Kia Motors also saw its cumulative sales drop 2.4 percent on-year to 1.02 million.
They are lower than 1.68 million and 1.05 million cars, which is what Hyundai and Kia should have sold during the cited period to achieve their annual target.
The slower-than-expected sales were attributed largely to less overseas demand, affected by unfavorable market conditions such as the weak yen and economic instability in emerging countries.
Hyundai and Kia saw their overseas sales shrink 2.7 percent and 3.9 percent on-year during the first four months of this year.
The weak yen and euro make it tougher for Hyundai and Kia to compete in global markets where foreign rivals are armed with higher price competitiveness. Unstable economies in emerging markets including Russia also dented their overseas sales.
On home turf, Hyundai’s lackluster performance is conspicuous with its cumulative sales here during the January-April period dropping 3.7 percent from a year earlier.
Hyundai’s sales of the Grandeur, Genesis and Equus premium sedans plunged 10.4 percent, 10.5 percent and 28.1 percent, while its more popular Avante compact posting almost zero growth.
The Tucson sport utility vehicle was among a few bright spots with its sales jumping 27 percent from a year earlier, apparently thanks to the launch of its new version.
Kia saw its domestic sales gain 7.2 percent but many of its major models posted declines, excluding some SUV models. Sales of the Morning fell 6.5 percent, while the K3, K5 and K7 mid-size sedans also plunged 23.8 percent, 23.9 percent and 23.2 percent, respectively.
Behind the sluggish demand is intensifying competition from foreign brands, which are chipping away at Hyundai and Kia’s long-held market domination with more incentives and promotions for customers.
Market experts said it would not be easy for Hyundai and Kia to achieve their annual sales targets this year, adding they could depend more on aggressive marketing and promotion tactics to prop up sales at home and abroad.
“It is still early to say, but if the current sales trend continues, it’s not easy for Hyundai and Kia to beat their sales target. You can expect that they will more likely depend upon incentives and other aggressive marketing to boost demand down the road,” an analyst at a local brokerage said.
Hyundai and Kia have not adjusted their annual sales targets, saying that things will pick up in the coming months, citing their plans to roll out new models in the second half of this year, including the latest versions of the K5, Avante and Sportage. (Yonhap)
