Seoul

SOUTH Korea's Hyundai Motor Group has flagged another year of tepid car sales growth on the back of a slow 2018, saying trade protectionism adds uncertainty and major markets such as the United States and China remain sluggish.

In his first New Year address to employees, group heir-apparent Chung Eui-sun said Hyundai Motor Co and Kia Motors Corp would complete a restructuring of South Korea's second-biggest conglomerate, which is widely expected to pave the way for him to formally succeed his octogenarian father as head of the group.

The complicated succession plans come as Hyundai contends with a bunch of problems that have cost it market share in China and the United States, and stalled its rise up the ranks of global auto-makers.

It missed a boom in sports utility vehicles (SUVs), faces potential US tariffs and a US investigation over how it handled a vehicle recall, and has lost ground in technological advances such as self-driving cars.

The 48-year-old Mr Chung, in address to hundreds of employees at the group's headquarters in Seoul, said: "Business uncertainties are heightening as the global economy continues to falter. Walls of protectionism are being constructed around the world.

"Internally, we face challenging tasks such as stabilising business in major markets like the US and China, while simultaneously enhancing our responsiveness to drive future growth."

Hyundai and Kia - together the world's fifth-biggest automaker - have set what they called a "conservative target" of 7.6 million vehicle sales for this year, a 3 per cent increase from the 7.399 million vehicles sold last year. The 2018 sales fell short of the group's target of 7.55 million vehicles, marking its fourth consecutive annual sales goal miss. The duo sold 7.25 million vehicles in 2017.

Morgan Stanley expects global auto production to fall 1 per cent this year, the first drop in nine years.

In that environment, the group said it would launch 13 new or face-lifted models this year, including a premium Genesis SUV and the Sonata sedan.

Sean Kim, an analyst at Dongbu Securities, said: "Hyundai will launch new models, but so will its competitors, making it difficult for Hyundai to increase shares in the sluggish markets in China, US and Europe."

Hyundai shares ended down 3.8 per cent and Kia slumped 2.7 per cent; the wider market was down 1.5 per cent.

Mr Chung said Hyundai would launch a pilot service of its autonomous taxis in South Korea by 2021 and expand partnerships with leading players in that area. He also pledged to "actively communicate with" shareholders, an apparent reference to US hedge fund Elliott Management Corp, which effectively scuttled a previous restructuring plan last year. REUTERS