Hyundai is planning to boldly increase its car sales in Europe, confident that the difficult market situation in the continent might increase its market share. The company hopes to hike 2012 sales in Europe by 15.4% 465,000 vehicles this year, with the backing of its Europe-targeted models like the i30 and i40.
According to its regulatory filing, Hyundai posted a 38% increase in net profit for the quarter ended December 31, 2011 from 1.45 trillion won to 2 trillion won, lower than the 2.26 million forecast by Thomson Reuters. Hyundai's overseas sales grew by 23.2 percent in the same period, offsetting a 5.8 percent drop in domestic sales.
“We believe the difficult situation will offer us an opportunity to expand our market share in Europe,” Lee Won-Hee, Hyundai's chief financial officer, said at a conference call. Lee said price competition could intensify temporarily in Europe and a restructuring of European carmakers could happen.
Hyundai continued to do better than the European market in 2011, selling around 398,129 units in the EU and EFTA countries, for an increase of 11.5%. The company’s European results accounted for around 10% of its global sales in 2011.
Nissan also forecasted an increase in sales in Europe this year, but the company did not specify some figures. Executives of different car companies admitted at the recently closed Detroit Auto Show that they expect the European market to post its fifth consecutive decline this year at five percent.
Hyundai also expects Europe to drop its demand for vehicles by 4.5% to 14.4 million vehicles in 2012. Total car sales in Europe for the whole industry dropped 1.7% in 2011, attributed mainly to the current European debt crisis that affected consumer confidence and could tighten the car loan market in the continent.
“There is a lot of uncertainty in the global economy in 2012," Lee forecast. Lee said the auto industry will be much affected by the European debt crisis as well as tensions over Iran. He said Hyundai plans to increase its U.S. sales by 4.5% to 675,000 vehicles in 2012, a drop from the 20% growth it posted in 2011.
The company plans to increase its foothold in the US by launching four new models including the Santa Fe SUVs. Lee said that although their Japanese rivals might increase incentives to regain market share in the U.S., Hyundai will maintain or lower its overall incentives. Industry executives in Detroit expect a steady recovery in car demand in the U.S. this year.