SEOUL (Bloomberg) -- Hyundai Motor Group expects “tepid growth” for global auto sales in the second half of this year because of economic uncertainties and a weak won.
Greece’s potential exit from the euro, falling interest rates in the U.S., and stagnant economic growth in China are expected for the remainder of the year, Chairman Chung Mong Koo said in an emailed statement. Emerging economies are also likely to suffer, with the yen and euro weakening even further, he said.
Chung’s prediction comes after sales fell at Hyundai Motor Co. and Kia Motors Corp. as a stronger won and weaker yen gave a competitive edge to Japanese carmakers like Toyota Motor Corp. The two South Korean companies are cutting costs and production to help revive profits, and Hyundai is planning to boost its SUV line-up to take advantage of the recent boom worldwide.
“Within current market situation, we must focus on boosting our sales capabilities,” Chung, who heads both Hyundai and Kia, said in the statement. “Each company needs to operate cohesively to form an effective companywide sales support system that will prepare us for the future.”
The Korea Automotive Research Institute, part of the group, cut its forecast on global auto industry’s growth rate for this year to 1.2 percent from the earlier 2.6 percent, according to the statement.
Earlier this month, Hyundai said domestic and overseas sales declined for a third consecutive month in June.
Hyundai is playing catch-up after missing out on a worldwide SUV boom sparked in part by a decline in gasoline prices. None of its vehicles ranked among the 10 best-selling SUVs in the first quarter in China, its biggest market.
In April, Hyundai showed a version of its revamped Tucson SUV at the Shanghai auto show. The company said in June it plans to sell 90,000 units of the new Tucson in U.S. next year. Hyundai will also introduce its new Creta SUV in India in the second half of this year.