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4-Traders Homepage  >  Equities  >  KOREA EXCHANGE  >  Kia Motors Corporation    000270   KR7000270009

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Kia Motors : Hyundai Motor, Kia Motors flag slow sales recovery in 2018

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01/02/2018 | 08:16am CET
Cars for sale are seen at Hyundai of Serramonte in Colma, California

South Korea's Hyundai Motor (>> Hyundai Motor Co) and Kia Motors (>> Kia Motors Corporation) on Tuesday flagged 4 percent sales growth in 2018, suggesting a slow recovery from a slump linked to their lack of SUVs in the United States and diplomatic tensions with China.

South Korea's Hyundai Motor (>> Hyundai Motor Co) and Kia Motors (>> Kia Motors Corporation) on Tuesday flagged 4 percent sales growth in 2018, suggesting a slow recovery from a slump linked to their lack of SUVs in the United States and diplomatic tensions with China.

Hyundai and smaller affiliate Kia said demand was expected to soften in the U.S. and Chinese markets as they unveiled a combined sales target of 7.55 million vehicles this year, from 7.25 million vehicles last year.

"The market environment is expected to be difficult due to a slowdown in major markets like the U.S. and China, prolonged low growth in the global economy and trade protectionism in major countries,” Hyundai Motor said in a statement.

Sales slumped 7 percent last year from 2016, falling well short of the firms' target of 8.25 million vehicles and marking their third consecutive annual miss, as buyers in China and the United States increasingly shunned sedans for SUVs.

A diplomatic row between China and South Korea over Seoul's deployment of a U.S. missile defence system also hit the carmakers' sales in the world's biggest auto market, although two countries recently agreed to normalise ties.

"This year's target for Hyundai and Kia is lower than expected. It seems to be a conservative target, reflecting a slow recovery in China and ongoing U.S difficulties," Kim Jin-woo, an analyst at Korea Investment & Securities said.

Hyundai Motor shares ended down 4.2 percent on Tuesday, and Kia Motors stocks finished 2.1 percent lower. The broader market <.KS11> rose 0.5 percent.

The grim outlook came as the Korean won strengthened to a more than three-year high against the dollar on Tuesday, threatening the competitiveness of South Korean exporters as their Japanese rivals benefit from the weakening yen.

The expiration of a tax cut on small-engine cars in China also would be a negative for Hyundai's sedan-heavy line-up, they said.

While Hyundai Motor has plans to offer more SUVs in the United States and China this year, analysts said new models such as the redesigned Santa Fe SUV may come too late in the year to significantly impact sales.

Hyundai Motor Group chairman Chung Mong-koo said in a statement it would "actively venture into" new markets like Southeast Asia, as protectionism was expected to grow elsewhere.

South Korea and the United States will hold talks on a trade deal on Jan. 5 although U.S. President Donald Trump has threatened to withdraw from the pact.

Chung, 79, skipped his annual New Year speech to employees for a second year in a row. He has not made any public appearances since December, 2016.

(Reporting Hyunjoo Jin and Joyce Lee; Editing by Stephen Coates)

By Hyunjoo Jin and Joyce Lee

Stocks treated in this article : Hyundai Motor Co, Kia Motors Corporation
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Financials ( KRW)
Sales 2017 53 309 B
EBIT 2017 841 B
Net income 2017 1 275 B
Finance 2017 1 039 B
Yield 2017 3,08%
P/E ratio 2017 10,02
P/E ratio 2018 6,10
EV / Sales 2017 0,23x
EV / Sales 2018 0,22x
Capitalization 13 255 B
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Mean consensus HOLD
Number of Analysts 37
Average target price 38 453  KRW
Spread / Average Target 18%
EPS Revisions
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NameTitle
Hyoung-Keun Lee Vice Chairman & Co-Chief Executive Officer
Han-Woo Park President, Co-Chief Executive Officer & Director
Chun-Soo Han Chief Financial Officer, Director & Executive VP
Ki-Tak Sung Executive Board Member & Head-Research
Eui-Sun Chung Director
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