Hyundai and Kia Expect a Slow Year for Sales Growth

  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

Hyundai Genesis

If a business school is looking for a case study to use for showcasing a successful market-entry program by a large company, look no further than the South Korean firms that are Kia and Hyundai, sister brands that started on the ground floor — the lowest rung — and have since steadily worked their way up to the point that now, they’re gunning for some of the biggest luxury brands around.

Such a transition has required a tremendous amount of growth over the years, but from the outlook recently issued by Hyundai and Kia executives, that growth won’t be continuing into 2014, as the companies have issued their weakest annual guidance in about eight years, Bloomberg┬áreports.

Combined┬ádeliveries will increase by roughly 4.1 percent to 7.86 million vehicles for this year, according to Chung Mong Koo, the┬áchairman of both Kia and Hyundai. Analyst expectations pegged deliveries to fall at 8 million units; it’s also the slowest rate of growth since 2006.

At the heart of the lower-than-anticipated projections was, perhaps not surprisingly, currency issues — a strong Korean won is competing with an increasingly weakening Japanese yen. In international markets, this gives Japanese manufacturers a price advantage when their vehicles are cross-shopped with Kia and Hyundai units.

More Articles About:

To contact the reporter on this story: To contact the editor responsible for this story:

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business