South Korean automaker, Hyundai Motor and affiliate Kia Motors have predicted that global sales will rebound in 2017 by a stronger-than-expected 5 percent, after posting their first annual sales fall in nearly two decades last year.
Sales could rise this year with emerging markets such as Russia stabilizing, and with Hyundai and Kia Motors gearing up to boost supply to the United States and China, analysts said.
However, margins could come under pressure as the South Korean duo – which together rank fifth in global sales – plan to add capacity in China and Mexico, just as many analysts expect those markets and the United States to slow.
The projected 5 percent rise in global sales for 2017 to 8.25 million vehicles easily beats the 1.9 percent rise forecast earlier by Hyundai Motor Group’s own think-tank.
“The 2017 goal is slightly higher than my projection,” said Ko Tae-bong, an auto analyst at Hi Investment & Securities.
Hyundai Motor likely clocked its fourth straight annual profit decline in 2016. Sales were hit by its sedan-heavy line-up, which meant it missed a boom in SUV demand, and sluggish emerging markets.
Hyundai Motor sold 4.86 million vehicles compared with its target of 5.01 million last year. Kia Motors sold 3.02 million vehicles, shy of its goal of 3.12 million.
Hyundai Motor is now targeting 2017 global sales of 5.08 million vehicles, while its smaller affiliate set its goal at 3.17 million vehicles.
Hyundai Motor shares ended up 2.7 percent on Monday and Kia Motors stocks were up 0.6 percent in a flat wider market .KS11.
Hyundai Motor shares fell for a third straight year in 2016, down 2 percent, while Kia Motors was the worst-performing stock among major car makers with a 25 percent slump.
