(Reuters) - Hyundai Motor Co’s (005380.KS) European business has deferred its sales and market share target by at least a year due to a dismal outlook that is now starting to worry the stronger carmakers as well as the weak.
“I suspect the whole plan of selling 500,000 cars next year and achieving 5 percent market share in 2015 is being deferred by one year to be realistic, because the market decline exceeded our expectations,” said Allan Rushforth, Chief Operating Officer of Hyundai Motor Europe in an interview published on Wednesday.
“So 2013 should give us half a million, with the 5 percent achievable in 2016 at the earliest.”
For the current year, Hyundai is aiming for a 3.5 percent share of the European market, with a slight increase of 0.1 or 0.2 percentage points in the next one.
Plunging car sales in key markets such as Italy, where demand has plumbed lows not seen in decades, have prompted carmakers like GM’s (GM.N) Opel as well as PSA Peugeot Citroen (PEUP.PA) and Fiat FIA.MI to record heavy losses at their European operations.
In the past few weeks, carmakers, including Volkswagen (VOWG_p.DE), Mercedes-Benz (DAIGn.DE), that had so far successfully navigated the crisis have warned that demand is shrinking at a rate they had not foreseen.
Whereas Porsche said it will protect its high profit margins by investing less and delaying the odd project [ID:nWEA2450], for example, Hyundai Europe aims to ramp up spending to promote the brand and reduce the customer churn rate.
“Eight out of 10 people cannot spontaneously recall our brand in marketing studies so we’ve drafted a brand strategy for Europe which will be presented to headquarters in mid-October,” he said.
“Historically over the last five years customer retention has been in the bottom quarter (among carmakers in Europe). We’ve been very much a stepping stone, but we are starting to reverse the tide,” Rushforth added.
Reporting By Christiaan Hetzner; Editing by Louise Heavens