ID :
78744
Mon, 09/07/2009 - 11:35
Auther :
Shortlink :
https://www.oananews.org//node/78744
The shortlink copeid
Crisis turns into opportunity for Hyundai, Kia
By Kim Deok-hyun
SEOUL, Sept. 7 (Yonhap) -- About a year ago, the collapse of U.S. bank Lehman
Brothers trigged a wave of recessions among the world's advanced and emerging
economies, casting a shadow on Hyundai Motor Co. and its affiliate Kia Motors
Corp.
Today, while the state of the global economy is still fragile, the dominant
automotive conglomerate in South Korea is on a roll with record sales worldwide
because of an increase in demand for its cheap and small cars and the Korean
currency's softness.
Hyundai and Kia were two of the big winners under stimulus programs by
governments worldwide to boost auto demand, particularly for Washington's Car
Allowance Rebate System, better known as "Cash for Clunkers."
Troubles at General Motors Co. and Chrysler Group LLC, which emerged from
bankruptcy protection, also offered a chance for Hyundai and Kia to boost their
sales in their biggest overseas market, analysts say.
"It's a golden opportunity for Hyundai and Kia to increase their combined U.S.
market share to 10 percent," said Suh Sung-moon, an auto analyst at Korea
Investment & Securities Co. in a recent research note.
In the first seven months of this year, Hyundai and Kia increased their combined
market share in the U.S. to 7.3 percent against 5.3 percent for all of 2008.
August was another banner month for the Korean carmakers. Last month, few
automakers worldwide saw their sales grow faster than Hyundai and Kia, which form
the world's sixth-largest automaker.
Hyundai said its sales jumped 25.1 percent to 245,876 units and Kia sold 97,080
units, up 4.1 percent.
Armed with generous incentive packages and aggressive ad campaigns, Hyundai and
Kia continued their assault on the U.S. market and notched their best August
ever.
In the U.S., sales of Hyundai soared 47 percent to 60,467 units and those of Kia
shot up 60.4 percent to 40,198 units, setting all-time sales records for the
Korean auto conglomerate.
"August was a shot in the arm for the industry, and a great month for Hyundai and
our dealers, said John Krafcik, chief executive of Hyundai's American unit, in a
statement.
A strong presence in China, India and other emerging markets also proved to be a
boon for Hyundai and Kia. In China, Hyundai's sales more than tripled last month
to a record 50,713 units.
Some analysts in Seoul likened a growth of Hyundai these days to that of Toyota
Motor Corp. in 1980s.
"In terms of U.S. market share, global sales and competitiveness in small cars,
the growth trend of Hyundai Motor is precisely in keeping with that of Toyota in
the past," said Lee Sung-jae, an analyst at Kiwoom Securities, in a report titled
"Toyota ... It's Not Just a Dream."
Hyundai has the "optimal structure" to cope with changes in demand by markets and
segments because the company generated more than half of its global sales from
emerging markets such as China and India, Lee said.
This week, Hyundai plans to unveil a revamped version of its best-selling Sonata
sedan to catch up with the Camry of Toyota and the Accord of Honda Motor Co.
Buoyed by such optimism, shares of Hyundai have jumped more than 2.5 times so far
this year, compared with a 43 percent advance in the benchmark stock index.
For the moment, there is no question that Hyundai and Kia seemed to be doing
well. But, concerns about the Korean currency's strength and may eat into
optimism.
The local currency, which hit an 11-year low against the U.S. dollar on March 2,
has gained about 20 percent since then, making it difficult for Hyundai to
maintain cheap prices overseas.
If the won advances 100 per the dollar, it would wipe out about 300 billion won
(US$240 million) in Hyundai's revenue, according to analysts.
In the April-June quarter of this year, Hyundai posted a net profit of 811.8
billion won, up 48 percent from a year ago, on sales of 8.08 trillion won.
Another lingering concern is an ongoing succession process. Recently, Hyundai
promoted Chung Eui-sun, the only son of Chairman Chung Mong-koo, as one of vice
chairmen at the company.
Local media have reported the younger Chung, 40, hasn't proven his worth to lead
the biggest carmaker in South Korea.
Since 2005, the younger Chung has been serving as one of the presidents of Kia.
But he was briefly demoted from the post a year later amid deteriorating
earnings.
kdh@yna.co.kr
(END)
SEOUL, Sept. 7 (Yonhap) -- About a year ago, the collapse of U.S. bank Lehman
Brothers trigged a wave of recessions among the world's advanced and emerging
economies, casting a shadow on Hyundai Motor Co. and its affiliate Kia Motors
Corp.
Today, while the state of the global economy is still fragile, the dominant
automotive conglomerate in South Korea is on a roll with record sales worldwide
because of an increase in demand for its cheap and small cars and the Korean
currency's softness.
Hyundai and Kia were two of the big winners under stimulus programs by
governments worldwide to boost auto demand, particularly for Washington's Car
Allowance Rebate System, better known as "Cash for Clunkers."
Troubles at General Motors Co. and Chrysler Group LLC, which emerged from
bankruptcy protection, also offered a chance for Hyundai and Kia to boost their
sales in their biggest overseas market, analysts say.
"It's a golden opportunity for Hyundai and Kia to increase their combined U.S.
market share to 10 percent," said Suh Sung-moon, an auto analyst at Korea
Investment & Securities Co. in a recent research note.
In the first seven months of this year, Hyundai and Kia increased their combined
market share in the U.S. to 7.3 percent against 5.3 percent for all of 2008.
August was another banner month for the Korean carmakers. Last month, few
automakers worldwide saw their sales grow faster than Hyundai and Kia, which form
the world's sixth-largest automaker.
Hyundai said its sales jumped 25.1 percent to 245,876 units and Kia sold 97,080
units, up 4.1 percent.
Armed with generous incentive packages and aggressive ad campaigns, Hyundai and
Kia continued their assault on the U.S. market and notched their best August
ever.
In the U.S., sales of Hyundai soared 47 percent to 60,467 units and those of Kia
shot up 60.4 percent to 40,198 units, setting all-time sales records for the
Korean auto conglomerate.
"August was a shot in the arm for the industry, and a great month for Hyundai and
our dealers, said John Krafcik, chief executive of Hyundai's American unit, in a
statement.
A strong presence in China, India and other emerging markets also proved to be a
boon for Hyundai and Kia. In China, Hyundai's sales more than tripled last month
to a record 50,713 units.
Some analysts in Seoul likened a growth of Hyundai these days to that of Toyota
Motor Corp. in 1980s.
"In terms of U.S. market share, global sales and competitiveness in small cars,
the growth trend of Hyundai Motor is precisely in keeping with that of Toyota in
the past," said Lee Sung-jae, an analyst at Kiwoom Securities, in a report titled
"Toyota ... It's Not Just a Dream."
Hyundai has the "optimal structure" to cope with changes in demand by markets and
segments because the company generated more than half of its global sales from
emerging markets such as China and India, Lee said.
This week, Hyundai plans to unveil a revamped version of its best-selling Sonata
sedan to catch up with the Camry of Toyota and the Accord of Honda Motor Co.
Buoyed by such optimism, shares of Hyundai have jumped more than 2.5 times so far
this year, compared with a 43 percent advance in the benchmark stock index.
For the moment, there is no question that Hyundai and Kia seemed to be doing
well. But, concerns about the Korean currency's strength and may eat into
optimism.
The local currency, which hit an 11-year low against the U.S. dollar on March 2,
has gained about 20 percent since then, making it difficult for Hyundai to
maintain cheap prices overseas.
If the won advances 100 per the dollar, it would wipe out about 300 billion won
(US$240 million) in Hyundai's revenue, according to analysts.
In the April-June quarter of this year, Hyundai posted a net profit of 811.8
billion won, up 48 percent from a year ago, on sales of 8.08 trillion won.
Another lingering concern is an ongoing succession process. Recently, Hyundai
promoted Chung Eui-sun, the only son of Chairman Chung Mong-koo, as one of vice
chairmen at the company.
Local media have reported the younger Chung, 40, hasn't proven his worth to lead
the biggest carmaker in South Korea.
Since 2005, the younger Chung has been serving as one of the presidents of Kia.
But he was briefly demoted from the post a year later amid deteriorating
earnings.
kdh@yna.co.kr
(END)
