(Yearender) Smoother ride ahead for Hyundai, Kia in 2010

By Kim Deok-hyun
SEOUL, Dec. 20 (Yonhap) -- After making strong gains in the United States, China
and emerging markets this year despite the global economic slump, Hyundai Motor
Co. and its affiliate Kia Motors Corp. appear likely to see their growth take
hold next year.
Hyundai and Kia, together forming the world's sixth-largest automaker, are well
positioned to navigate the global auto industry's worst downturn in decades with
line-ups focused on cheaper, small cars.
Adding to their advantage, Hyundai and Kia have been major beneficiaries of
incentive programs launched by governments in advanced consuming nations aimed at
boosting auto demand.
While governments worldwide have gradually ended those incentives, analysts
expect Hyundai and Kia will continue to see sales growth in 2010. There is also
new optimism that the worst of the industry's downturn is over.
"Hyundai and its affiliate Kia have shown robust growth in sales and gained
market share in major markets year-to-date, despite the onslaught of one of the
most serious downturns in auto industry's history last year," said Park
Jeong-min, a corporate ratings director at Fitch Inc.
Park said South Korea's weak currency particularly helped Hyundai and Kia boost
market shares. But the analyst said the Korean auto conglomerate was able to
weather the downturn more so because of its competitiveness and large presence in
the robust Chinese and Indian markets.
Reflecting the successful run, Fitch upgraded its rating outlook for Hyundai and
Kia to positive from negative.
In the third quarter of this year, Hyundai's net profit tripled to a record 979
billion won (US$841 million). Kia also posted its biggest-ever quarterly profit
of 402 billion won in the same period.
Hyundai's strength in small-car market, its handsome profits as well as the local
currency's depreciation are adding luster to its stock. Year-to-date, the stock
price of Hyundai Motor has more than doubled.
Next year, Hyundai and Kia plan to sell 5.39 million units, up 19 percent from
this year's sales estimate of 4.53 million units, according to company officials.

All of four analysts surveyed had a "buy" recommendation on Hyundai and Kia.
Suh Sung-moon, an analyst at Korea Investment & Securities Co., expected Hyundai
to post a bigger profit in the final quarter of this year, compared with the
quarter earlier.
"Hyundai's pre-tax profit for the fourth quarter may top 1 trillion won," Suh
said in a research note, raising Hyundai Motor's six-month target price to
150,000 won.
Tong Yang Securities Inc. analyst Ahn Sang-joon also painted a rosy picture for
Hyundai and Kia, citing a gradual recovery of auto markets in the United States
and China.
"Hyundai's sales growth in the U.S. and China are expected to continue throughout
next year," Ahn said.
(END)