Hyundai and Kia shares hit by sales forecast
- 2 January 2014
- From the section Business
Shares of Hyundai and affiliate Kia Motors have dipped more than 5% after the carmakers issued their weakest growth forecast in nearly a decade.
Their combined sales are expected to grow by 4% to 7.86 million vehicles in 2014.
The outlook is lower than the 6.2% growth posted by the two firms in 2013.
The forecast comes amid increased competition from Japanese rivals who have benefited from a sharp decline in the yen's value in recent months.
The Japanese currency fell nearly 20% against the US dollar in 2013. A weaker yen makes Japanese goods more affordable for foreign buyers.
At the same time, the South Korean won has strengthened in recently - making South Korean cars more expensive for foreign buyers and negating some of the price advantage the firms had enjoyed in recent years.
The won has risen nearly 10% against the US dollar since June last year.
To add to Hyundai and Kia's woes, they have also been facing increased competition in the US from resurgent domestic carmakers Ford and General Motors.
That has seen their growth in the US - one of their biggest markets - slow.
Hyundai chairman Chung Mong-koo said: "Competition among companies is intensifying, as the global economy has entered an era of low growth".
Hyundai has also been hurt in recent months by a series of strikes by staff over pay, which resulted in fewer vehicles being produced at its South Korean factories.