Seoul, January 4

South Korea’s largest automakers, Hyundai Motor and its affiliate Kia, have forecast their slowest sales growth in a decade for 2016, due to slumping demand in China and a strong Korean won.

The two companies estimated combined total sales of 8.13 million cars worldwide this year, compared to about eight million in 2015, Chung Mong-Koo, who heads the Hyundai Motor Group, said in a message to employees today.

It is the smallest sales growth since 2006 for the group — the world’s fifth-largest automaker — which has been hit hard by slowing demand in its key China market that accounts for nearly a quarter of combined global sales.

“Slow growth is expected to persist in the global economy due to weak growth in China, the slumping oil price and uncertainty in emerging markets over the rate hike in the US,” Chung said in his message.

The group saw its share in China — the world’s biggest auto market — shrink to below 10 per cent last year on intensifying competition from Japanese rivals and home-grown Chinese brands churning out cheaper models.

A rally in the South Korean won against the euro, Japanese yen and Brazilian real also blunted Hyundai’s price competitiveness in emerging markets against its Japanese rivals like Honda and Toyota.

Hyundai Motor has reported a drop in profits for the last seven quarters — a trend Chung said it would try to curb with a strong marketing push in Latin America.

He also flagged a campaign to push Hyundai’s newly launched luxury brand as it seeks to shed its image as a cheaper alternative to bigger rivals like Toyota.