Hyundai Motor Co and affiliate Kia Motors said on Monday they aim to increase their combined sales to 8.25 million vehicles globally in 2017, despite rising competition.
The 2017 target is slightly higher than their 2016 goal of 8.13 million vehicles. The South Korean automakers’ final sales figures for 2016 are due out later on Monday, with analysts expecting a miss due to weak demand in emerging markets.
“The 2017 goal is slightly higher than my projection,” said Ko Tae-bong, an auto analyst at Hi Investment & Securities, adding that the performance of new models would be the key to success after some disappointments in recent years.
With emerging markets such as Russia stabilizing, and with Hyundai and Kia Motors gearing up to boost vehicle supply to the United States and China, sales could get a lift this year.
But Hyundai Motor and Kia Motors – which together rank fifth in global sales – plan to add capacity in China and Mexico this year, just as those markets and the United States are seen slowing, likely pressuring margins.
“With the global economy continuing its low growth, trade protectionism spreading and competition intensifying in the automobile industry, uncertainty is growing more than ever,” Hyundai Motor Group Chairman Chung Mong-koo said in his New Year message to employees.
Hyundai Motor likely clocked its fourth straight annual profit decline last year, hurt by its higher exposure to weak emerging markets, and a product line-up that features more sedans than sport utility vehicles, just as SUVs have become more popular across many global markets.
Hyundai Motor is targeting 2017 global sales of 5.08 million vehicles, while Kia Motors set its goal at 3.17 million vehicles.
Kia Motors Vice Chairman Hank Lee told employees on Monday that the automaker hoped to revive growth this year, after falling short of its 2016 sales target.
Hyundai Motor shares were flat in a wider market .KS11 that was down 0.4 percent in early morning trade, while Kia Motors shares were down 0.3 percent
Hyundai Motor shares fell for a third straight year in 2016, down 2 percent versus the wider market’s 3 percent gain. Kia Motors shares slumped 25 percent last year, making them the worst-performing stock among major car makers in the world.