South Korean automakers Hyundai and Kia expect their company sales this year to grow at the slowest pace since 2003, due to capacity constraints and a weaker yen that will likely give Japanese rivals an edge in important auto markets.
Together, the two companies are the world's fifth largest automaker by sales. But on Friday they announced that they don't expect to sell more than 8.2 million vehicles in 2015. If they're correct, it would mean a 2.5 percent increase from a year ago, the smallest rise since 2003.
Sales grew just 2 percent 12 years ago, according to company data.
"While low growth continues for the world economy, political uncertainty grows in emerging markets and competition is intensifying among automakers," Chung Mong-koo, chairman of the family-run conglomerate, said in a statement to Reuters, who polled five analysts.
The prediction is in line with the 8.27 million average forecasted by the five analyst.
Hyundai-Kia have seen sales increase at a slow pace ever since Chung put an unofficial moratorium on new plants in 2013 to focus on quality.
The two companies said in 2014 that they would work on building factories in Mexico and China in order to expand overall capacity, but production from these plants won't start until later on this year.
Next year, Hyundai is expected to debut revamped versions of its Tucson SUV and the Elantra compact, vehicles that are considered important in order to revive sales after the Sonata sedan failed to impress car buyers.
Hyundai and Kia have given low sales targets in the past and exceeded them. Last year, sales rose 5.8 percent to 8 million vehicles, compared to its earlier target of 7.86 million due to strength in China and other emerging markets, according to Reuters.
Hyundai Motor stocks fell 29 percent in 2014, while Kia shares fell 7 percent in the broader market.
Hyundai Motor America announced November sales of 53,672 on Dec. 2, which was down four percent compared to the same period in 2013. The automaker hasn't announced December sales numbers yet.
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