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China market 'not so bright' for Hyundai, Kia: executive

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(Globalpost/GlobalPost)

BEIJING, Aug. 23 (Yonhap) -- A slowing Chinese economy is expected to take a toll on sales by Hyundai Motor Co. and its affiliate Kia Motors Corp., a senior Hyundai executive said Friday, voicing concern over the "not so bright" outlook on the world's largest auto market.

Hyundai Motor Vice Chairman Seol Young-heung, however, said in a statement that Hyundai and its sister company Kia are likely to meet their combined sales target of 1.47 million vehicles in China this year.

"The changing business environment in China is not so bright because of the slowdown in the Chinese economy and its policy of curbing purchases of new cars," Seol said, referring to the Chinese government's widening policy of curbing auto purchases to fight pollution and traffic congestion.

Seol called for Chinese dealers of Hyundai and Kia to "meet the sales target this year by sharing anticipated crisis scenarios," according to the statement.

With the Chinese government accelerating urbanization and China's growing middle class, Hyundai and Kia would focus on "introducing sport utility vehicles and entry-level luxury cars to strengthen market share in the future," it said.

The growth of China's middle class has brought sweeping economic changes and social transformation, with urban-household income forecast to at least double by 2022, according to research by consulting firm McKinsey.

In the first seven months of this year, Hyundai and Kia sold a combined 900,825 vehicles in China, the statement said.

Hyundai, South Korea's top carmaker, posted a second-quarter net profit of 2.52 trillion won (US$2.25 billion), compared with 2.55 trillion won for the same period a year earlier, despite the global economic downturn. The strong performance was helped by robust sales growth in China.

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