With their own capacity limiting how many vehicles they could produce and sell, Hyundai Motor Co. and Kia Motors Corp. expect their weakest sales growth in nine years in 2015. According to Hyundai and Kia chairman Chung Mong Koo, the carmakers are bound to post a combined delivery growth of just 2.5 percent to 8.2 million vehicles this year -- the slowest since 2006.
The forecast was in line with the median estimate of 8.2 million units, as per five analysts surveyed by Bloomberg News. Chung remarked that the South Korean carmakers will "actively respond" to global economic uncertainties and a weaker yen that Japanese carmakers have been using to their benefit. He added that both Hyundai and Kia could "easily" achieve the target set for this year.
The South Korean carmakers are intending to hike output in Chine by 38 percent by 2018 to meet growing demand in the country. Hyundai and Kia have already launched updated versions of their Tucson and Sportage SUVs as they bid to maintain their market share in China.
According to Koh Tae Bong, an analyst at HI Investment & Securities Co., Hyundai and Kia are expected to have a slow 2015 as they have no room to hike output with no new sites or expansions planned for the year.
He added that maintaining market share and determining how well the biggest markets react to the new SUV models are keys for Hyundai and Kia for this year.
In separate filings, Hyundai and Kia are aiming for 2015 vehicle sales of 5.05 million and 3.15 million units, respectively.
Hyundai and Chinese partner BAIC Motor Corp. plans to expand output in China by 57 percent through building two new sites – in Chongqing and Cangzhou -- each having an annual output capacity of 300,000 vehicles. Kia, meanwhile plans, to hike capacity at its Jiangsu site to 450,000 units by 2016, from the current 300,000.