Hyundai Motor falls to four-year low after Korea sales slump

Posted on June 02, 2015 05:56:11 PM | BREAKING NEWS

HYUNDAI MOTOR Co. fell to the lowest level in more than four years in Seoul trading after the Korean carmaker’s domestic sales declined for a second month.

Hyundai dropped 6.8 percent to 144,000 won as of 10:11 a.m., headed for the lowest closing price since September 2010. The company said Monday its South Korean sales in May fell 8.2 percent from a year earlier.

The carmaker failed to boost deliveries even after offering price cuts on most models as well as interest-free loans, a sales tactic it last used during the Asian financial crisis almost two decades ago. Hyundai’s domestic market share sank to 32 percent in January, the lowest in at least 15 years, amid rising competition from foreign brands.

“The situation looks dire. At this rate Hyundai may not even be able to meet its annual sales target,” said Lee Sang Hyun, an analyst at IBK Securities Co. “Hyundai will need to step up its efforts, including sales promotions, to win back customers at home.”

Hyundai affiliates also slumped. Kia Motors Corp. fell 3.9 percent, while parts makers Hyundai Mobis Co. and Hyundai Wia Corp. dropped 7.6 percent and 7.9 percent, respectively.

Imported cars have gained in popularity among Korean customers as they’ve become more affordable, helped by free- trade agreements with the US and the European Union. BMW, Mercedes-Benz and Toyota collectively posted a 33 percent gain in deliveries in South Korea in the first quarter, according to data from the local vehicle importers association.

China, US

Ssangyong Motor Co., Renault SA’s Korean venture and Kia also registered gains in the period, while Hyundai’s sales fell 3.4 percent.

Hyundai’s deliveries have also declined this year in China, the company’s biggest market, while gains in the US have come on the back of a surge in incentives. The company plans to continue local marketing efforts to boost Korean sales, it said in a statement Monday.

South Korea accounted for 46 percent of the automaker’s annual revenue and 34 percent of total production in 2014, according to company figures and data compiled by Bloomberg. -- Bloomberg