Seoul: Hyundai Motor Co said on Tuesday its February sales rose 23% but momentum is set to weaken as Toyota offers aggressive incentives to win back customers and the end of tax breaks hits domestic sales.
The South Korean carmaker is keen to drive its global market sales at the cost of Toyota’s month-long safety crisis, but kept its 2010 US market share target unchanged as competition heats up.
Rivalry in the battered US market has intensified as the sector recovers from its worst downturn. Toyota, seeking to regain market share lost during its recall crisis, is planning to roll out an aggressive incentive programme in March, including 0% financing and free maintenance, a source briefed on the matter said on Monday.
Hyundai, which offered Toyota-targeted incentives in February, said it had no immediate countermeasures against aggressive sales promotions from Toyota in the United States.
“Instead, we will go ahead with our plans. We will do our utmost to reach this year’s goal in the United States,” Chaz Lee, director of Hyundai’s overseas marketing division, told reporters on the sidelines of a ceremony to sign its sponsorship contract with the Union of European Football Associations (UEFA).
The South Korean carmaker is targeting 4.5% market share in the United States this year, up from last year’s 4.2%.
Hyundai sold 250,995 vehicles last month, driven by brisk sales in new models of Sonata sedans and sports utility vehicle Tucson.
That represented a 23% rise from a year earlier, marking its eighth consecutive month of double-digit growth since July, 2009.
But month-on-month, it dropped 7.5% as the government ended in December tax incentives for customers trading in old cars, while reduced working days in February due to Lunar New Year holidays cut sales in China, its biggest overseas market.
Hyundai said last week it would recall 47,000 of its new Sonata sedans to fix faulty door latches, seeking to avoid the damaging criticism Japanese rival Toyota faces for its handling of a series of safety problems.
Kia Motors Corp, Hyundai’s affiliate, said sales jumped 46% to 138,811 vehicles in February from a year ago.
Shares in Hyundai Motor ended down 1.3% prior to the monthly results, lagging a 1.3% gain in the broader market.