Hyundai Motor shares tumble on weak November sales

Hyundai MotorsHyundai Motor's US sales remained sluggish, Chinese sales lost momentum (AP)

Hyundai Motor Co shares tumbled on Tuesday as the South Korean automaker's November sales came under pressure from Japanese rivals in China and the weaker yen, analysts said.

Hyundai shares fell as much as 4.4 percent to 238,500 won ($230) each, their lowest intraday level since Aug. 28, after the company said on Monday that its overseas vehicle sales suffered their first year-on-year drop since the 2009 financial crisis.

Investors took the sales figures as a warning sign that Hyundai, which together with affiliate Kia Motors Corp rank fifth in global auto sales, may be losing momentum in emerging markets as well as the United States and Korea.

Hyundai said overseas vehicle sales fell 1 percent in November from a year earlier, while South Korean sales slumped 12 percent from a year earlier.

Analysts said that while Hyundai's US sales remained sluggish, Chinese sales lost momentum due to a high base from last year when its new plant started operation, and as Japanese rivals made a strong comeback following anti-Japanese protests.

Toyota Motor Corp and its two local joint-venture partners saw their China sales jump 41 percent in November from a year earlier.

"So far Hyundai's China sales have offset its lacklustre U.S. sales. The China effect is disappearing now," said Song Sun-jae, an auto analyst at Hana Daetoo Securities.

He said Hyundai is suffering from a double whammy of capacity constraints in China, the United States and other markets, and rising competition that undermined demand for Hyundai cars.

"Without a signal of a major capacity addition, it will be difficult for Hyundai to turn around its sales given adverse currency movements," he said.

Hyundai plans to release its retail U.S. sales figures this week.

The dollar hovered near a six-month high against the yen in early trade Tuesday on the prospect of more stimulus from the Bank of Japan, further boosting the price competitiveness of Japanese exports from Japan.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus