SEOUL, KOREA - On May 17, the European Automobile Manufacturers’ Association (ACEA) reported that the EU market had grown for the first time since Sep 2011, led by Germany (+3.8% YoY), Spain (+10.8% YoY) and the UK (+14.8% YoY). Overall, EU and EFTA (Iceland, Norway and Switzerland) car sales climbed 1.8% YoY to 1,081,307 units, narrowing the YoY contraction to 7% from as much as 9.7% in 1Q13. In Apr, Kia Motors (Kia) sold 30,036 (+6.4% YoY) units, while Hyundai Motor (Hyundai) sold 36,572 (+1.8% YoY). As such, Kia’s market share grew to 2.8% from 2.7% a year earlier, while Hyundai’s remained flat at 3.4%.
- As the EU was the only weak major market, the recovery should be positive. In particular, it should be more favorable for Kia as it rolls out a series of new models. Following the new Carens’ launch in Apr, the pro cee’d (3-door hatchback version) and the cee’d GT (sports wagon) will be released in Jun. And, the K5 facelift will be sold from 3Q13, while the redesigned Soul and Sportage facelift are scheduled for European rollouts in 4Q13. As such, we forecast Kia’s outperformance in Europe will continue.
- We maintain BUY and a 12M TP of W79,000 at 8x 12MF PE, the sector’s average.
*Source: Korea Investment & Securities Co.
