Top South Korean auto maker Hyundai Motor Co. said yesterday it expected global revenue growth to more than double in 2007, boosted by higher sales abroad and increase in sales of high-end models.
The world's No. 6 carmaker, also announcing a small fall in December 2006 car sales volume, said it expected revenue to jump by 13.5 per cent to 42 trillion won ($45 billion) after it rose 5.7 per cent in 2006.
Hyundai envisages a brighter year in 2007 after it saw profits last year squeezed by losses from labour unrest and stronger won currency
Growth in overall sales at Hyundai is expected to accelerate this year, fuelled by healthy overseas sales of premium cars recently launched including the Santa Fe sport utility vehicle (SUV), analysts said.
"Hyundai is expected to accomplish the target as productions at home and abroad will be able to meet demand abroad," said Yong Dae-in, an auto analyst at Goodmorning Shinhan Securities.
Hyundai Motor's global sales rose to 37 trillion won in 2006 from 35 trillion in 2005, a Hyundai official said.
The 2007 revenue forecast includes sales at Hyundai's overseas units. Sales from its South Korean-based production units only are expected to rise 7.3 per cent this year to about 31 trillion won, according to analysts polled by Reuters Estimates.
But some analysts said Hyundai's sales target was too aggressive as local sales were seen under pressure amid sluggish domestic demand in Asia's third-largest economy and lack of new models.
"There is no room for Hyundai's sales to increase as Hyundai does not have a specific new model to boost sales and as consumer sentiment is still weak," said Choi Dae-sik, an analyst at CJ Investment Securities.
Hyundai aims to sell 2.735 million vehicles in 2007, up 9.4 per cent from 2.501 million sold last year.
"We will meet the target by growth in overseas sales as we plan to ship the Veracruz SUV to the US in March and to launch the 'FD' in May," Jake Jang, a Hyundai spokesman said, referring to a compact model for the European market.
"We also aim to increase sales at home with aggressive marketing although domestic consumption has not revived yet," he added.
In December 2006, Hyundai sold 247,254 vehicles, 1.5 per cent lower than a year ago when South Korea's customers rushed to show rooms for new cars before a tax benefit expired.
But South Korea's five auto makers reported a 4.5 per cent rise in sales volume last month, helped by higher exports.
Hyundai's affiliate Kia Motors Corp., the country's No. 2 auto maker, said it aimed to sell 1.54 million vehicles in 2007, up 22.1 per cent from 2006. It targets 22 trillion won in revenue, up 15.8 per cent.
Neither company provided profit forecasts and officials from the auto makers declined to comment on profits.
Hyundai Motor group, which includes affiliates such as Hyundai Steel Co. and parts maker Hyundai Mobis Co., aims to increase its group-wide sales by 14 per cent to 106 trillion won, with exports of $40.1 billion.
Shares in Hyundai rose 0.15 per cent to 67,500 won compared with a 0.06 per cent gain in the broader market. Kia was up 0.4 per cent up at 13,500 won.
Hit by weaker profits, shares in Hyundai fell 30.7 per cent in all of 2006, lagging the wider market's four per cent gain. Kia shares dropped 49.3 per cent last year.