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South Korea’s leading automaker, Hyundai Motor Group, said in a New Year’s announcement that it aims to sell 7.6 million vehicles worldwide in 2019.
However, in recent years the group has been losing traction in both the United States and China, and whether the group, which comprises automakers Hyundai Motor and Kia Motors as well as related affiliates, will meet their 2019 forecast is questionable: Prior to 2018, the group failed to attain its sales targets for four consecutive years, according to Reuters.
In 2018, the group targeted sales of 7.55 million vehicles, but sales from January to November reached only 6.75 million – 89 percent of the target, Yonhap news agency reported. December figures are due to be released on Wednesday.
Executive Vice Chairman Chung Eui-sun told employees in a new year speech on Wednesday that the firms would be launching new models in key markets, and would beef up their presence in the SUV sector.
Chung, 48, is in the process of taking over the country’s second-biggest conglomerate by assets, making him the third member of the Chung family to run the auto firm. His 80-year-old father, Chung Mong-koo, has not been seen in public for over a year, and is believed to be suffering health problems.
The junior Chung faces a stern task on the domestic front. Third quarter operating profits were down 76% in 2018, and the group is plagued by annual strikes from its militant union – Hyundai Motor’s union is known in Korea as “the aristocracy of labor” – and by lack of productivity: it takes more man hours to produce a Hyundai than a Toyota, GM or Ford vehicle.
Meanwhile, according to a critique by Bloomberg, the group is losing traction in the critical China market, where its market share is falling; it also faces pressure from activist foreign shareholders to upgrade governance.
And Chung faces a major technology-based gamble of his own making. The group is betting nearly $7 billion on hydrogen fuel cell electric vehicles, a technology which has huge potential across various industrial sectors that could pay off handsomely, but which is far from proven in the auto sector.