Seoul: South Korean carmakers Hyundai Motor and Kia Motors continued to post double-digit annual sales growth for June driven by brisk sales of new models, boding well for second-quarter earnings to be released later this month.
The duo, which ranks fifth in global car sales, should continue to post healthy sales and earnings in the second half, but face the challenge of managing investor expectations in the face of the weakening global economy and reviving Japanese rivals, analyst say.
“The slowing global economy may deal a blow to consumer sentiment. But there is pent-up demand for cars in the United States after the market collapsed in the wake of the global financial crisis,” Yoon Phil-joong, an analyst at Samsung Securities, said.
“Consumers also place value on practicality during difficult economic times. Korean carmakers are relatively safe. Hyundai and Kia are on track to meet their annual sales target, and will continue to post solid earnings in the second half,” he said.
Hyundai’s global sales rose 12.3% to post a monthly record in June, helped by solid sales in key markets such as the United States, China, India and South Korea. Kia’s June sales surged 22%.
Shares in Hyundai finished up 1.48% and Kia shares were up 2.35% in a wider market that ended up 1.19%.
Hyundai and the top three US carmakers are expected to post double-digit growth in US vehicle sales in June, whereas Japan’s Toyota Motor and Honda Motor are seen suffering a double-digit slump, according to Edmunds.
Hyundai and Kia gained share in key markets in the second quarter, when Japanese rivals suffered production losses from the 11 March earthquake, tsunami and subsequent power shortages.
Hyundai Motor Group said on Thursday it was aiming to raise US auto sales by 18.2% this year to 1.06 million vehicles, up from its previous target of 1.01 million, driven by strong sales of Hyundai’s Sonata sedan and Kia’s Optima sedan.