Dongfeng Yueda Kia miss sales target by Q3

Shanghai, October 10, 2008 -(Gasgoo.com) To reverse the sales slide, South Korea's Hyundai Motor Group has decided to replace the general manager of its joint venture company Dongfeng Yueda Kia Motor Co., said auto.sina.com.cn today. This six-year-old Chinese venture of Hyundai Kia will have its fifth CEO soon, possibly a Korean again.

At the beginning of this year, Dongfeng Yueda Kia planned to double its auto sales year on year to more than 200,000 units as its ambitious target of 2008, but industry analysts thought of this as an impossible mission. In the first nine months, or three quarters, of 2008, the sales of Dongfeng Yueda Kia only totaled only a bit more than 100,000 vehicles, and in late September the company had to cut its 2008 sales goal down to 160,000 units.

After its second plant went into operation last year, Dongfeng Yueda Kia now has an annual production capacity of 260,000 units and the output can reach 430,000 units by 2010. If the sales downturn continues, it means nearly half of the capacity will become idle. In 2007, the JV already registered losses of 75 million yuan ($11 million) due to the failing sales and the huge investment in the second facility.

To benefit from the favorable policies of Jiangsu province and cut operational costs, Dongfeng Yueda Kia has decided to move its sales head-office in November from Shanghai to the neighboring Nanjing city, the provincial capital of Jiangsu. The move is still left to be approved by shareholders of the joint venture, sources said.

Dongfeng Yueda Kia Automobile Company, set up in June 2002, is a joint venture between the Dongfeng Motor Corporation (50%), Hyundai Kia Automotive Group (25%), and Jiangsu Yueda Investment Co., Ltd. (25%).

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