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Hyundai targets 14 percent rise in vehicle sales
By siliconindia
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Wednesday, 03 January 2007, 18:30 IST
SEOUL: Hyundai Motor and its affiliate Kia Motors, South KoreaÂ’s largest and third-largest car makers, plan to rake up 14 percent more vehicle sales this year as compared to the last year. This incidentally will mean more than double the pace of last yearÂ’s growth.
Plodded by Sonata sedans and Santa Fe sport-utility vehicle sales, the car makers expect to sell around 4.28 million vehicles in 2007. The groupÂ’s revenue will also rise 14 percent to 106 trillion won ($114 billion), Seoul-based Hyundai Motor said in a statement.
While Hyundai Motor is building new plants in China and India, since it sells more vehicles in the emerging economies, Kia (in which Hyundai Motor has a 38.7 percent stake) is constructing a $1.2 billion factory in the US state of Georgia. Said Hyun Hye Jung, who helps manage about $1.2 billion worth of assets at Woori CS Asset Management as an analyst: “Hyundai Motor’s target for double-digit growth looks too aggressive. The won’s gain and slower growth in auto demand worldwide won’t be any better than last year.”
Hyundai Motor shares fell 31 percent last year while KiaÂ’s share value nearly halved, as the South Korean currencyÂ’s 8.6 percent gain against the dollar hurt earnings. Hyundai MotorÂ’s shares rose 0.2 percent to 67,500 won at the close of trading in Seoul and Kia Motors shares rose 0.4 percent to 13,500 won. The two carmakersÂ’ sales rose 6.2 percent to 3.76 million vehicles in 2006 from a year earlier with domestic sales climbing 3.3 percent and exports gaining 7 percent. GM Daewoo Auto & Technology, a subsidiary of General Motors, boosted sales 32 percent to a record 1.53 million vehicles, overtaking Kia as the countryÂ’s second-largest car maker.
Hyundai Motors in a statement said that it expects its own revenue to rise 14 percent to 42.3 trillion won this year; shipments are expected to climb 9.4 percent to 2.74 million units. In another statement, Kia said itÂ’s aiming to raise unit sales by 22 percent to 1.54 million units and boost its revenue 16 percent to 22 trillion won in revenue this year.
“These are very aggressive targets,” said Stephen Ahn, an analyst at Woori Investment & Securities in Seoul, who rates Hyundai Motor “hold”. “Considering the won’s appreciation and the lukewarm local sales, I don’t think they can meet the goals easily.”