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  • News Desk
  • Aug 3rd, 2004
  • Comments Off on Hyundai Motor July sales up, but outlook cloudy
Hyundai Motor Co, the world's seventh-largest car maker, reported on Monday July sales nearly doubled from the same month in 2003, bolstered by red-hot exports and after a prolonged strike last year.

But the outlook for Hyundai, was darkened by surging labour costs and slowing economic growth in China, a key export market, analysts said.

Hyundai Motor, which controls half of the domestic market, said total sales in July jumped by 91 percent to 186,929 vehicles compared with 97,702 a year earlier.

"Last year, there was an extended strike that hampered operations severely," said a Hyundai spokesman. "The jump in numbers was largely due to a low base effect."

Hyundai's exports, which make up about 60 percent of its earnings, surged by 150 percent to 142,815 vehicles in July, compared with 57,494 units a year earlier.

Local sales, facing generally sluggish domestic consumption, rose by 10 percent to 44,114 units. Hyundai is South Korea's top auto maker.

Hyundai sold a total of 196,242 vehicles in June, including a monthly export record of 149,921 units. It was hit hard by a 45-day union strike last year that began in late June and stretched until early August.

Labour strife is a key deterrent to doing business in Korea, according to foreign investors, and part of the reason for the relatively low value of local shares, known as the "Korea Discount."

Poor labour relations have also been cited as one of the obstacles blocking the company from achieving its goal of becoming one of the world's top five auto makers by 2010.

Last month, Hyundai wrapped up its quickest labour settlement since 1995 by agreeing to a pay rise of just over 6 percent. The settlement followed a five-day strike.

Shares in Hyundai, South Korea's seventh-biggest stock with a market value of over $8 billion, were down 1.15 percent to 42,900 by 0445. The broader market fell 2.13 percent.

Copyright Reuters, 2004


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