Korea’s largest auto manufacturer Hyundai Motor Co., is facing problems from surging materials costs, a slowing global economy and rising competition.
“High oil prices, a slowing global economy from subprime concerns, competition with advanced rivals in Japan and Europe as well as with emerging competitors in China and India—these all are threats for us that we should deal with wisely,” Chung wrote in a letter to shareholders published at the car maker’s annual meeting
on Friday in Seoul.
Hyundai agreed with a supplier’s group to pay 20% more for auto parts because of the rising steel prices.
In order to fight these increasing costs, Hyundai aims to boost sales in developing markets like West Asia, Middle East and Africa.
The car maker aims to sell 737,000 vehicles in emerging markets this year, including West Asia, Africa and Eastern Europe, 12% more than in 2007. Total sales will rise 20% to 3.11 million autos from last year.
Hyundai shares also rose 4.05% to close at 69,300 won (Rs2, 886) in Seoul.