June 2, 2015 / 2:56 AM / 4 years ago

UPDATE 2-Investors dump Hyundai Motor shares, spooked by weak sales data

* Shares slide 10 pct to lowest in nearly five years

* U.S. and China factory shipments tumble in May - analyst

* Hyundai too reliant on sedans amid boom for SUVs

* Increased output of Tuscon SUV won’t come till Sept (Recasts, updates shares and adds analyst comments)

By Hyunjoo Jin

SEOUL, June 2 (Reuters) - Hyundai Motor Co shares slid 10 percent to their lowest levels in nearly five years on Tuesday, after sharp declines in shipments underscored a heavy reliance on sedans that have failed to woo customers despite aggressive sales promotions.

Shipments from the automaker’s U.S. factory slumped 17 percent in May from a year earlier while its Chinese factories saw shipments drop 12 percent, according to Yim Eun-young at Samsung Securities who looked at detailed preliminary data made available to analysts.

The dismal performance underscores how Hyundai has lost its way - going from a top performer during the global financial crisis to an industry underperformer - after failing to predict a global boom in sport utility vehicles.

Also rubbing salt into the wound has been a further weakening of the yen which benefits rival Japanese automakers. On Tuesday, the dollar hovered at fresh 12-1/2 year highs against the yen, extending a bullish run after upbeat U.S. data.

Hyundai Motor said last month it would boost production of Tucson sport utility vehicles in South Korea to meet strong demand at home and abroad, but the output increase will not come until September.

“Hyundai has been late in dealing with the market trend towards SUVs,” said Ko Tae-bong, auto analyst at Hi Investment & Securities.

The 10 percent decline, which is set to be its biggest daily percentage drop since August 2011, wiped $3.7 billion off Hyundai’s market value by mid-afternoon. Shares in affiliate Kia Motors dropped 4.9 percent.

Official May sales figures showed a second consecutive month of decline with overseas sales falling 6 percent and domestic sales sliding 8 percent.

Hyundai is due to release U.S. retail sales later on Tuesday and Samsung Securities’ Yim said she expects Hyundai sales not only to fall, but also lag Kia for the first time.

The declines come despite aggressive sales incentives. In the first quarter, Hyundai was forced to boost U.S. incentives by nearly 30 percent, to an average $2,200 per vehicle, to clear inventory. In South Korea, it has been offering interest-free loans for its Elantra and Sonata sedans since May.

Ko at Hi Investment said unless Hyundai brings forward the launch of its revamped Elantra - the first makeover of the key model in five years - to September in Korea, it will be challenging for it to achieve its annual sales target of 5.05 million vehicles.

In contrast, boosted in part by the popularity of its SUVs, Ford Motor Co has announced plans to make an additional 40,000 vehicles by cutting summer downtime. (Additional reporting by Yeawon Choi; Editing by Edwina Gibbs)

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