The FINANCIAL — According to Gulfnews, Hyundai Motor, South Korea's biggest carmaker, slashed its 2008 domestic sales target by six per cent as rising oil costs and a weakening economy damp demand for automobiles.
Hyundai aims to sell 630,000 cars, including its Sonata sedan and Santa Fe sport-utility vehicles, in the domestic market this year, down from an earlier target of 670,000, the automaker said.
The automaker sold 625,275 vehicles in the local market last year.
Hyundai, its affiliate Kia Motors and other South Korean carmakers are facing slowing demand at home as consumer confidence in Asia's fourth-biggest economy slumped to the lowest level in more than seven years in the second quarter.
Rising food and oil prices have cut the purchasing power of potential car buyers in Korea.
"Even the lowered target may not be easy for Hyundai to meet at this point," said Park Hwa Jin, an analyst at Shinyoung Securities, who has a 'buy' rating on the stock.
"The good news is its exports are doing great and the company will be able to offset the lower domestic sales with sales in overseas markets."
Shares up
Hyundai Motor shares have risen 0.3 per cent this year in Seoul trading, outperforming the benchmark Kospi index's 17 per cent slide.
Domestic sales at Hyundai declined 15 per cent in June, the first drop in six months, as higher prices for oil and consumer goods damped demand for cars, the company said.
Exports gained 20 per cent last month as its fuel-efficient model won more customers out of Korea, leading an 11 per cent increase in overall June sales for Hyundai.
South Korean inflation will accelerate to the fastest pace in a decade this year, the Bank of Korea said on July 1, propelled by record fuel and food prices that will also hinder household spending and business investment.
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