Hyundai Motor cuts its domestic sales forecast by 27%

Seoul November 30, 2004; The Korea Times reported that Hyundai Motor Co., Korea¡¯s largest carmaker, cut its forecast for domestic sales this year by 27 percent because of weakening demand and rising oil prices.

The automaker lowered its forecast for sales at home to 1.1 million units from 1.5 million units in a statement seen by Bloomberg citing Hyundai Motor Vice Chairman Kim Dong-jin, which earlier appeared on the company¡¯s internal Web site. The company said it expects demand to fall further.

¡°The business environment is worsening,¡± Kim said on the internal site for Hyundai Motor employees.

¡°We are being threatened by weak domestic sales and high oil prices.¡± Hyundai Motor, Kia Motors Corp. and Korea¡¯s three other automakers have been focusing on exports as consumer demand slumps at home. Growth in Asia¡¯s third-largest economy stayed at a one-year low of 0.6 percent in the third quarter, partly because credit card debts forced consumers to spend less.

Hyundai Motor¡¯s exports will also be affected because of the recent gains made by the Korean won, Kim said. It is important for the company to ¡°tighten its belt¡± until there are signs that business is improving, he said.

Shares in Hyundai Motor fell as much as 2.9 percent and traded 1.5 percent lower at 51,700 won, as of 12:31 p.m. yesterday in Seoul. They have gained 2.4 percent this year, compared with a 6.6 percent increase for the benchmark KOSPI.

(Bloomberg)