November sales: Hyundai’s shares tumble image

Hyundai Motor Co tumbled today as the South Korean automaker’s November sales came under pressure from Japanese rivals in China and the weaker yen, according to analysts.

Hyundai shares fell as much as 4.4 % to 238,500 won ($230) each, their lowest intraday level since August 28 after the company said on Monday that its overseas vehicle sales suffered their first year-on-year drop since the 2009 financial crisis.

Kia Motor shares, which relies more on domestic production, slumped as much as 4.4 % on Tuesday.

The share drop came despite the good report from the US, where its sales climbed 5 % to 56,005 vehicles in November from a year earlier, driven by sales of Santa Fe sport utility vehicles and other models.

Investors took the sales figures as a warning sign that Hyundai, which together with affiliate Kia Motors Corp rank fifth in global auto sales, may be losing momentum in emerging markets and Korea.

Hyundai said overseas vehicle sales fell 1 % in November from a year earlier, while South Korean sales slumped 12 % from a year earlier.

Song Sun-jae, an auto analyst at Hana Daetoo Securities said Hyundai is suffering from a double whammy of capacity constraints in China, the United States and other markets, and rising competition that undermined demand for Hyundai cars.

“Without a signal of a major capacity addition, it will be difficult for Hyundai to turn around its sales given adverse currency movements,” he said.

The dollar hovered near a six-month high against the yen in early trade Tuesday on the prospect of more stimuli from the Bank of Japan, further boosting the price competitiveness of Japanese exports from Japan.

Via Reuters