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South Korea's Hyundai Motor Co and affiliate Kia Corp forecast on Wednesday that their combined global sales will rise about 2% in 2024, even as last year's sales fell short of target.
The duo sold 7.3 million vehicles in 2023, about 3% less than their combined target of 7.52 million, largely due to a difficult economic environment, including rising interest rates and inflation that pushed vehicles out of the reach of some buyers.
The companies said they would target global sales of 7.44 million vehicles this year.
"Hyundai plans to take a lead in electrification and focus on optimizing profitability by strengthening its global electric vehicle (EV) production infrastructure, establishing flexible business strategies to adapt to market changes, and reinforcing preemptive risk management capabilities," Hyundai said in a statement.
Kia sold 3.09 million vehicles globally in 2023, posting a new annual global sales record, it said in a statement. Kia’s previous best yearly performance was in 2014, with sales of 3.04 million units.
Analysts said this year's sales targets for the two companies appeared to be achievable, but that economic issues, including high interest rates, as well as rising incentives would have an impact on auto demand and profitability.
Hyundai is aiming for a 0.6% rise in annual global sales to 4.24 million vehicles, while Kia set its sales target at 3.2 million units, up about 4% from last year.
"It seems that Hyundai's goal appears to be more conservative than Kia's ... Kia is set to launch new electric vehicles this year, but we need to factor in how the recent slowing growth of global EV sales would fold out," said Shin Yoon-chul, an analyst at Kiwoom Securities.
Hyundai Motor Group Executive Chair Euisun Chung in his New Year address on Wednesday emphasized customer satisfaction and called for a corporate culture of "preparation" to make swift decisions.
"The best strategy is earning the full trust of our customers, not quickly following our competitors ... In order to turn these external challenges into opportunities and achieve long-term sustainable growth, we must be prepared,” Chung said in the address.
Shares of Hyundai Motor and Kia closed down 3.3% and 3.9% respectively, versus a 2.3% fall in the benchmark KOSPI.
(Reporting by Heekyong Yang and Joyce Lee; Editing by Jacqueline Wong and Mark Potter)
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