South Korea’s largest automakers Hyundai Motor and its affiliate Kia have forecast sales of 8.25 million vehicles this year amid hopes that new factories will tap into emerging markets.
The projected sales for 2017 mark a slight increase from the previous year’s target of 8.13 million, the Hyundai Motor group chairman Chung Mong-Koo said in a New Year email message to employees on Monday.
Hyundai, which along with Kia forms the world’s fifth-largest automaking group, has seen profits falling for years amid slowing demand in its key China market and a strong won that hurt its competitiveness overseas.
The group missed its annual sales target for a second year in a row last year when major strikes by South Korean workers hit production.
Hyundai-Kia jointly sold a little over 7 million units from January to November in 2016.
But it hopes to turn things around with a new factory to open in Chongqing, China, and the launch of new vehicles.
“We should strengthen production networks among 35 plants in 10 countries, including the Chongqing plant to open this year,” Chung said.
“We...will also strengthen product lineup in luxury and environmentally-friendly cars and introduce more than 10 new vehicles this year,” he added.
New models—including sports utility vehicles popular in China—will also be produced at newly-opened plants in Changzhou in China and Mexico, according to the group.
The Chongqing plant—Hyundai’s 5th plant in China—is aimed at exploiting the fast-growing midwestern region in the country, the world’s largest auto market.
The group has struggled to boost its market share in China, which fell to 8.1 per cent in 2016 following growing competition from Japanese rivals and homegrown Chinese brands.
In October Hyundai Motor announced a sharp fall in profits for a third quarter, hit by lengthy industrial action that also took a toll on the national economy.
Tens of thousands of workers at the firm’s plants in South Korea staged full or partial strikes for several weeks through July to October demanding higher wages.
Production losses were estimated at 3 trillion won ($2.6 billion), and Hyundai said its third quarter net profit fell 7.2 percent from the previous year to 1.1 trillion won.
It was the 11th consecutive quarter of profit downturn for Hyundai.