Carmakers drive into emerging markets

Carmakers drive into emerging markets

By Jung-a Song

Published: January 30 2008 16:19 | Last updated: January 30 2008 16:19

South Korea expects its automobile exports to grow 5.7 per cent this year compared with a more robust 13.3 per cent in 2007, due to cooling demand from the US and western Europe.

But that it expects auto exports to grow even amid an economic slowdown in the US says a lot about where South Korean and other Asian carmakers are looking for business these days.

Hyundai Motor, South Korea’s biggest automaker, says it will focus on penetrating emerging markets this year and strengthen its product line-up in the US to cope with cooling demand.

“We are closely watching how US demand changes this year,” says Jake Jang, a Hyundai spokesman. “We just hope that there won’t be any sharp decrease in auto demand there.”

Hyundai is actually hoping for a 10 per cent increase in sales to the US, which remains its biggest export market and accounted for the sale of 467,000 vehicles last year. It argues that its strength in compact cars and lower prices due to a weaker won will help it weather cooling demand as US consumers demand more economical cars.

But Hyundai also wants to penetrate emerging markets such as Russia, India, and China as well as Latin America and the Middle East. “Those markets are growing so fast. So we will focus on [them] this year,” says Mr Jang.

The same is true of Japan’s Toyota, which is now vying with General Motors for the title of world’s largest carmaker.

Toyota managed to increase US sales last year, thanks to strong demand for its Prius hybrid car, and expects sales in that market to be slightly up this year to 2.64m units.

But Toyota is looking to China and Russia for its real growth. Toyota’s sales in China are forecast to surge 40 per cent to 700,000 units, following a 62 per cent jump in 2007. In Russia, Toyota forecasts sales of its cars to rise substantially to at least 200,000, after increasing 52 per cent last year to 160,000 units.