Hyundai, Kia set too ambitious sales target in 2017
By Lee Hyo-sik
Hyundai Motor and its affiliate Kia Motors vowed Monday to sell a total of 8.25 million vehicles at home and abroad in 2017, up from last year’s target of 8.13 million.
But many are already raising doubts over whether the two carmakers can achieve the goal, calling it too ambitious, given their disappointing 2016 performance.
Hyundai and Kia sold a combined 7.88 million cars in 2016, falling short of their 8.13 million target. They even failed to produce 8 million vehicles, due to a prolonged strike.
Hyundai’s sales declined 2.1 percent to 4.86 million from 2015, with those of Kia inching down 1 percent to 3.02 million.
“Hyundai and Kia clearly failed to achieve their 2016 goal of selling 8.13 million cars globally. Their sales volume did not even exceed the 8 million mark,” said an industry analyst, who declined to be named. “Given the continued unstable labor-management relations and growing global economic uncertainties, it will be really difficult for the two companies to produce and sell 8.25 million cars this year.”
Hyundai and Kia officials admitted that their 2017 goal may be ambitious, but stressed they will take all possible steps to accomplish the sales target: Hyundai 5.08 million and Kia 3.17 million.
“We know it will be a daunting task to boost our global sales to 8.25 million against a host of unfavorable business conditions,” a company official said. “But we cannot set a goal conservatively. That is not who we are. Our corporate spirit has always been working toward an ambitious goal and achieving the impossible.”
He said the two carmakers combined will operate 35 plants in 10 countries by the end of this year, stressing its production volume will total 8.32 million.
Last year, Kia opened a plant in Mexico and Hyundai its fourth plant in China. In the second half of this year, Hyundai plans to open its fifth Chinese plant in Chongqing.
“Hyundai and Kia produced and sold fewer than 8 million cars in 2016. But the production will reach as many as 8.32 million this year if our new plants go into operation without a mishap. Of course, stable labor-management relations are key to accomplishing our 2017 goal,” the official said.
To that end, Chairman Chung Mong-koo said in a New Year’s speech Monday that the two automakers will introduce more SUV models, as well as electric and other eco-friendly vehicles to meet changing consumer demands.
Chung also said the companies will launch more Genesis brand models in the United States and other advanced markets, and develop more vehicles tailored to each market.
“We will continue to expand our investment in developing self-driving and other advanced auto technologies to enhance our competitiveness and improve product quality,” the chairman said.