By Ryu Jin
Staff Reporter
Hyundai Motor Vice Chairman Kim Dong-jin has expressed concern that the won's strength may hurt the profitability of his company, which sells four out of every five of its cars abroad.
In an interview with Bloomberg, he expected that the won would continue to rise, dealing a blow to the top South Korean automaker, which forms the world's sixth-largest automotive group along with Kia Motors.
``The won's appreciation is the No. 1 obstacle, the No. 1 headwind for us,'' Kim said in the interview. ``The currency problem is beyond our control, so the only solution is to lower costs.''
Hyundai Motor, which competes with Japan's Toyota Motor and Honda Motor, has to contend with a currency that has strengthened four times as much as the yen in the past two years, the news agency said.
As part of efforts to combat the impact of a strong currency, Hyundai Motor began to slash costs 20 percent through 2009 by streamlining development and production and negotiating with suppliers.
Hyundai Motor cut prices as much as 13 percent in China and slashed its 2007 sales target by 16 percent to 260,000 units in September as Japanese rivals gained market share. ``We did not prepare for the competitors' penetration,'' Kim told Bloomberg.
Kim also expressed hope for the success of Genesis, the first rear-wheel drive luxury model that Hyundai Motor will roll out in the United States in the first half of next year following its home debut in January.
``The Genesis will be priced much lower than our competitors,'' Kim said. ``It'll range at around 40 million won to 50 million won, that's about $45,000.''
The Genesis will challenge Daimler AG's Mercedes-Benz E class sedans, BMW AG's 5 series sedans and Toyota's Lexus models. BMW's most basic 528i sells for about $44,300 and its top model 550i is $58,500.
Kim also said that his company aims to nearly double its sales in China, its second-biggest market, to 500,000 units next year after opening a second factory.