South Korea's largest carmaker Hyundai Motor has scaled down its sales targets in China and the U.S. due to tough market conditions, officials said Sept. 3. The firm said its venture in China reduced its annual target from 320,000 units to 260,000 in the first such move since the Chinese business was launched in 2002.
"The company will cut prices in China to cope with poor sales and competition," a Hyundai spokesman said. In the first seven months of this year, Hyundai saw sales in China falling 18.2% from a year earlier to 128,587 units.
In the U.S. market Hyundai lowered this year's target from 555,000 units to 510,000, citing weak demand caused by subprime woes. "Demand is expected to remain weak in the U.S. due to the U.S. subprime mortgage loan problem," the spokesman said.
Hyundai, which with affiliate Kia Motors is the world's sixth-largest automaker, sold 280,106 cars in the U.S. in the first seven months, down 0.4% from a year earlier. It also faces falling productivity, labor disputes and shrinking profits. Net profit plunged 34% to 1.53 trillion won (US$1.63 billion) last year due to strikes and the won's rise.
The company faces another possible stoppage after its union voted on Sept. 1 for a strike. The union has agreed to put off industrial action until after Sept. 4. So far this year a 13-day partial strike over a bonus dispute and protests against a free-trade deal with the U.S. have cost 336 billion won.
Copyright Agence France-Presse, 2007
