Despite strong demand for products like the Elantra, Hyundai expects its growth to slow in 2012.
It’s been a whirlwind for Korean carmakers, Hyundai and Kia both posting double-digit global growth in 2011 as they’ve landed one successful new product after another. But senior company officials warn that the Korean powerhouse likely can’t keep that torrid pace going in 2012.
It’s not that the days of sales growth are over, but Hyundai Group Chairman Chung Moon-koo says the maker has to focus on other things – like quality – rather than growth alone.
“We will strengthen quality management we have continuously pursued,” the 73-year-old executive declared during a New Year’s speech to Hyundai/Kia employees.
Nonetheless, Hyundai and sibling Kia don’t expect to just tread water in 2012. Chung expects to record a 6% increase for the company, now the world’s fifth-largest automaker, which would push its global volume to 7 million.
In 2011, however, the two brands collectively increased sales by 15%, to 6.6 million. That was well ahead of Hyundai and Kia’s original target of 6.33 million. A significant chunk of the growth spurt came from the U.S., where products like the Hyundai Elantra and Kia Soul are in short supply, dealer often selling new vehicles as soon as they arrive from the factory.
According to Chung, the slight slowdown in Hyundai/Kia growth will match a general softening of the global automotive market, especially in Europe.
“I expect the automotive industry to see growth slowing because of the European debt crisis and the global economic slowdown, while competition is expected to intensify among automakers this year,” Chung told his employees.
(Not everyone expects the global market to slow down, a new forecast predicting strong demand in the U.S. and worldwide – with the exception of Europe. Click Herefor that story.)
Industry analysts question whether Chung – – the son of Hyundai’s founder – is being too conservative, some projecting volumes could top 7.2 million.
There is no sign that demand is slowing in the U.S., where production capacity is the big bottleneck. And Kia is looking to build its presence in the emerging “BRIC” nations, notably including China, where it has a third plant coming on line, and Brazil, where it will soon open its first plant.
And there will be plenty of new products coming, as well, including a replacement for the Santa Fe, the SUV many credit with launching the Hyundai brand’s dramatic revival nearly a decade ago.