Kia Motors and Hyundai Motor on Monday released forecasts for 2017 global sales to rebound by 5%, which was stronger than had been expected, after posting a drop in annual sales for the first time in close to two decades during 2016.
Sales could increase in 2017 in emerging markets like Russia if it can stabilize, and due to Kia and Hyundai planning to increase supply to China and the U.S., say analysts.
However, margins could be pressured as the duo from South Korea, which are together No. 5 in global sales, get ready to add capacity in Mexico and China, at a time when a number of analysts expect those two markets along with the U.S. to slow down.
With the economy across the globe continuing a slow rate of growth, the spread of trade protectionism and the intensifying of competition across the auto industry, uncertainty continues to grow more than at any time before, say Chung Mong-koo the Chairman at Hyundai Motor in a message to begin the New Year to his employees.
The chairman, who is 78, said that car maker will launch over 10 new models every year including a new SUV in advanced markets along with a sedan in 2017.
The projected increase of 5% in global sales during 2017 to over 8.25 million vehicles beats the 1.9% increases that was forecasted earlier by the own think tank of Hyundai Motor.
Hyundai Motor likely suffered through its fourth consecutive profit decline for the year during 2016. Sales were pressured by its heavy lineup of sedans, which meant it missed out on the SUV boom. Sluggish sales in emerging markets also added pressure.
Last year, Hyundai Motor had a vehicle target for sales of 5.01 million, but sold just 4.86 units. Kia Motors’ goal for 2016 was 3.12 motors and it sold 3.02 million units.
Hyundai Motor has now targeted global sales for 2017 of 5.08 million units, while Kia has a goal of 3.17 million.
The vice chairman of Kia Motors Lee Hyong-keun has warned that tough competition is on the horizon for 2017.
Hyundai Motor stock was up 2.7% in Monday trading, while Kia Motors increased 0.6% in a market that was flat for the most part starting the new year.
Shares of Hyundai Motor dropped for a third consecutive year during 2016 by 2%, while Kia was the major carmakers’ worst performer with a drop of 25%.
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