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Hyundai, Kia forecast sales to rebound on capacity, models

China Daily | Updated: 2017-01-03 08:17

Hyundai, Kia forecast sales to rebound on capacity, models

A visitor uses the Hyundai Virtual Drive Simulator at the Frankfurt Motor Show in Frankfurt, Germany. [Photo/Agencies]

Hyundai Motor Co and Kia Motors Corp, South Korea's largest automakers, have set a target to deliver a combined 8.25 million vehicles in 2017 as they see competition in the auto industry intensify amid global uncertainties.

Hyundai forecasts selling 5.08 million vehicles while Kia sees 3.17 million vehicles sales, according to regulatory filings. The combined sales target compares with the 8.24 million units average estimate of five analysts surveyed by Bloomberg News.

The automakers are counting on new plants in China and Mexico, where they will gradually raise output, and introduction of models including a sport utility vehicle. They will likely see demand waning in two of its biggest markets, with industrywide sales growth in China after an increase in the levy on small-engine vehicles and as the United States Federal Reserve raised interest rates in December and forecast a steeper path for borrowing costs in 2017.

"Amid slowing global economic growth, uncertainties are rising more than ever as protectionism spreads and competition intensifies in the auto industry," Chairman Chung Mong-koo, said in a statement issued to employees. He urged "swift and flexible" responses to the uncertain business environment.

Deliveries of the two automakers in China, their largest market by volume, rose 7.2 percent to about 1.57 million vehicles in the 11 months through November. Industrywide demand in the world's biggest auto market climbed after the government cut a levy on small-engine vehicles in October 2015 to 5 percent. The tax has been raised to 7.5 percent this year and will be further increased to 10 percent in 2018-a move that's expected to slow the pace of sales growth this year.

Bloomberg

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