South Korea's three largest automakers may fail to meet their sales targets this year amid slow demands at home and abroad, market observers said Thursday.
In the first 10 months of the year, top automaker Hyundai Motor Co. sold 3,890,825 cars globally, down 2.6 percent from the same period last year, the company said earlier.
The drop was attributed to dips in both domestic and overseas sales, which slipped 6.5 percent and 2 percent on-year, respectively.
Kia Motors Corp., the No. 2 automaker here and an affiliate of Hyundai Motor, also had its sales shrink 2.2 percent to 2,401,828 cars in the January-October period, due to a 3.3 percent on-year drop in overseas sales. Its domestic sales gained 2.9 percent over the cited period.
The two leading automakers, together the world's fifth-largest automotive group Hyundai Motor Group, had set their combined annual global sales target at 8.13 million.
The target, even if realized, would mark a slight drop from about 8.15 million cars sold last year.
Group officials note the companies will likely fail to meet the target.
"Meeting the sales target will not be easy due to an overall drop in domestic demand coupled with a long series of labor strikes at our production facilities," a group official said earlier.
Unionized workers of Hyundai Motor had staged 24 rounds of full and partial walkouts until a wage deal was reached in mid-October, causing 142,000 cars in missed output and over 3 trillion won ($2.56 billion) in damages. Workers of Kia Motors had also staged
23 rounds of strikes until earlier this month, causing 2.1 trillion won in damage and 107,000 cars in missed production.
"We expect to miss our sales targets for the Kia K7 midsize sedan, the Mohave and the Sorento SUVs due to a cut in output caused by labor strikes," a Kia official has said.
Market observers also blamed the termination of temporary tax cuts on new vehicle purchases at the end of June for the drop in vehicle sales here.
For instance, five automakers sold a combined total of 812,265 vehicles here in the January-June period, up 10.9 percent from the same period a year earlier, while their combined global sales slipped 1.7 percent on-year over the cited period.
But in July, the automakers' domestic sales plunged 10.6 percent to 121,144 cars, according to market observers.
Slowing demands at home are also causing problems for No. 3 automaker GM Korea Co., despite the carmaker having a record year so far.
The South Korean unit of US carmaker General Motors Co. saw its domestic sales spike 12.5 percent on-year to 144,726 in the first 10 months of the year.
However, the figure apparently is not big enough to set up the carmaker for its annual domestic sales target of 190,000 cars.
"Sales targets frequently change depending on market conditions and actual figures, but the company's real goal of achieving a double-digit market share remains unchanged," a GM Korea official said, asking not to be identified.
"It still remains a challenge, but we will certainly do our utmost to meet the target."
A market share of 10 percent or higher will mark the first time for GM Korea in nine years since 2007.
As of end-September, GM Korea's domestic market share stood at 9.7 percent of all vehicles sold in South Korea, including commercial trucks and buses. (Yonhap)
