South Korean automaker Hyundai Motor had a troublesome day on Tuesday as its shares dropped 10 percent to their worst level in almost half a decade, with the company being dumped by investors after presenting a bid delivery decline for the month of May.
The increasing declines in sales showcase the company’s heavy reliance on sedans that are falling out of favor with consumers across the planet, and especially in China and the United States, the world’s first and second largest single auto markets. According to Yim Eun-young at Samsung Securities, who had available detailed preliminary data, production at the carmaker’s US plant dropped 17 percent last month and its Chinese assembly facilities slumped 12 percent. The slowing performance shows how South Korea’s largest carmaker has managed to underperform the industry – back in the days of the global financial crisis it was a stellar player, but now has failed to forecast the global demand for sport utility vehicles. Additionally, the automaker also has been hit by the fact that Japanese automakers are taking advantage of the currency effects triggered by the weakening yen.
Hyundai has been trying to address its sport utility vehicle weakness by announcing last month it would lift production output of the new Tucson SUV in South Korea to meet upbeat demand for the model at home and overseas, though the expansion is not expected until September. “Hyundai has been late in dealing with the market trend towards SUVs,” comments Ko Tae-bong, auto analyst at Hi Investment & Securities. The automaker’s sales data for last month showed a negative trend for the second month in a row, with internal deliveries down eight percent and overseas sales sliding six percent.