SEOUL, Nov. 6 (Korea Bizwire) — Hyundai Motor Co. and sister Kia Motors Corp., South Korea’s two leading automakers, are expected to undershoot their sales target this year in light of weak track records so far, industry sources said Tuesday.
Hyundai and Kia sold a combined 6.09 million vehicles in the first 10 months of this year, or 80.7 percent of their full-year targets set at 7.55 million.
Hyundai’s sales rose 2.6 percent on-year to 3.77 million vehicles during the January-October period, with Kia’s shipments increasing 2.6 percent to 2.32 million.
Given the monthly average sales of slightly over 609,000 units over the cited period, Hyundai and Kia are projected to sell a combined 7.31 million vehicles for all of this year, or about 97 percent of their goals.
Last year, the combined sales of Hyundai and Kia stood at 7.25 million units, well below their target of 8.2 million.
Industry sources said Hyundai and Kia will unlikely achieve their full-year sales goals, though December is usually a high-demand month.
It would mark the fourth straight year that the two flagships of Hyundai Motor Group have fallen short of their annual sales targets.
The grim outlook comes as Hyundai and Kia have fared ill in China and the United States, the world’s two largest auto markets. In particular, they have been struggling in China this year, despite Beijing’s eased sanctions on South Korean firms over Seoul’s deployment of an advanced U.S. missile defense system on its soil.
In another blow to Hyundai and Kia, global ratings agencies have recently downgraded their credit rating and outlook on the carmakers, citing their worsening profitability.
Global industry leader Standard & Poor’s downgraded the credit rating of Hyundai and Kia to BBB+ from A- on Wednesday, with Moody’s Investors Service lowering their outlook from Baa1 stable to negative the next day.
It was the first rating downgrade for Hyundai and Kia since 1998, the first year when related data was available.
In late October, Hyundai logged a 67 percent on-year tumble in third-quarter net profit to 305.9 billion won (US$273 million) due to a litany of negative factors, including unfavorable foreign exchange rates. Kia swung to a profit of 297.74 billion won from a net loss of 291.77 billion won a year earlier thanks mainly to a low base effect.