Hyundai-Kia sees slowest growth in 12 years

Monday, 5 January 2015 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Hyundai Motor and affiliate Kia Motors Corp aim to lift global vehicle sales by 2.5% in 2015, as capacity constraints and a weak market recovery set up the South Korean pair for their slowest expansion in 12 years. Hyundai-Kia, together the global No.5 automaker, have seen their sales growth slow since their record expansion in 2010 as factories reach full strength and competition rose at home and in key markets like the United States.

A customer (front) listens to an employee near a Hyundai Solaris car at a showroom of a dealership in Stavropol, southern Russia - Reuters Hyundai Motor said on Tuesday it would build two factories in China, its first new manufacturing plants since 2012, but that they would not go into production until later 2016. For 2015, the pair aims to sell 8.2 million vehicles – 5.05million for Hyundai alone – versusthe 8.27 million average forecast of five analysts polled by Reuters. The duo offered conservative sales targets and beat them in recent years. In 2014, sales rose 5.8% to eight million vehicles, versus its earlier target of 7.86 million due mainly to strength in China and other emerging markets. “I expect to comfortably achieve our sales target this year,” Chung Mong-koo, chairman of the family-run conglomerate, said in a New Year speech to employees on Friday. The global vehicle market is likely to grow 3.9% this year, versus 3.5% expansion in 2014, as recovery in emerging markets outside of Russia offsets sluggishness in the United States and Europe, said a Hyundai think tank. “There is still uncertainty about what’s going to happen to Russia,” Hyundai-Kia Executive Vice President Park Hong-jae, who heads the Korea Automotive Research Institute, told reporters last week. Shares of Hyundai Motor fell 29% in 2014, a year of sluggish earnings and investor outrage over a $10 billion property purchase in Seoul. Kia shares fell 7% versus a 5% decline in the broader market.

Hyundai’s brand value crosses $10b mark

Hyundai Motor Group Chairman Chung Mong-koo speaks at the company’s new year ceremony in Seoul January 2, 2015 - Reuters Hyundai Motor Company, a leading multinational automotive manufacturer, has seen its brand value exceed $10 billion for the first time, according to Interbrand’s Best Global Brands 2014 report. Fueled by the successful launch of the new Genesis and Sonata, as well as the implementation of its ‘Modern Premium’ brand direction, the company has witnessed its brand value post another two-digit growth in 2014. Hyundai has been included in Interbrand’s Best 100 Global Brands for 10 consecutive years, and this year’s figure represents a 16% increase from last year’s $9 billion value and a nearly 200% jump from its $3.5 billion value in 2005. “Hyundai is one of the fastest growing automotive brands in terms of both volume and brand value,” Interbrand said in a statement. “Hyundai makes unique convenience features available across a broader range of vehicles to enhance driving experience and customer satisfaction,” it stated. “As a result of these efforts, brand awareness of product attributes like design, and the kind of brand loyalty that comes from an emotional connection are becoming key drivers over price,” it added. Hyundai’s brand value ranking which rose three notches to reach the top global 40 ranking for the first time this year, is due to building a loyal fan base through continued enhancements in its product line-up, including innovative eco-friendly products such as the world’s first assembly-line produced ix35 Fuel Cell vehicle. The company’s active involvement in high-profile sports marketing activities with UEFA, FIFA, and the World Rally Championship also continue. In Korea, the automaker opened its first brand experience space, Hyundai Motorstudio, while a second one is scheduled to open in Moscow later this year. Hyundai’s ranking has risen 44 places since 2005, when it first announced its shift to brand management. The Korean automaker’s brand value has also increased an average of 20% each year after the company introduced its new ‘Modern Premium’ brand direction in 2011. Won Hong Cho, Chief Marketing Officer, Hyundai Motors, said: “We’re implementing a wide variety of brand-related activities that aren’t simply focused on increasing sales, but are aimed at becoming a brand that our customers genuinely love.” “We will continue to invest in our brand, by providing Hyundai Motor’s unique premium experience in all aspects of the customer’s journey with our brand,” he added. The Interbrand rankings are calculated using companies’ financial balance sheets combined with marketing activities, while also reflecting each brand’s potential profit.