ID :
208258
Tue, 09/20/2011 - 11:30
Auther :
Shortlink :
https://oananews.org//node/208258
The shortlink copeid
S. Korean firms strive to minimize impact of Italian downgrade
SEOUL, Sept. 20 (Yonhap) -- South Korean exporters are seeking ways to deal with Europe's worsening debt problems and a credit rating cut for Italy that could cause a drop in demand for their goods, industry sources said Tuesday.
Executives of top automaker Hyundai Motor Co. and its smaller affiliate Kia Motors Corp., led by the group's Chairman Chung Mong-koo, are heading to the companies' European plants and sales points to check production facilities and attempt to bolster sales to counter effects of the continuing crisis.
Hyundai Motor Group said it will focus on high efficiency vehicles such as its new mid-size wagon i40 to appeal to belt-tightening European consumers, hoping to turn the crisis into an opportunity to tap deeper into the European market.
According to industry data, the two companies sold a combined 45,911 units in August for a market share of 5.9 percent. This surpassed the companies' previous record of 5.2 percent reached in August 2010 and in April 2011.
Electronic firms are also keeping close tabs on the European market to prepare for a worsening situation, where the fiscal problems could translate into an economic recession.
Samsung Electronics Co., South Korea's leading home appliances and mobile handset maker, is concerned that the downgrade of Italy's sovereign rating and a prolonged Greek debt crisis will threaten growing sales in Europe as the impact sweeps through the region. Samsung Electronics posted 36.1 trillion won (US$31.4 billion) of sales in Europe last year, accounting for 23.3 percent of the 154.6 trillion won worth of products it sold.
LG Electronics Inc., the country's No. 2 electronic appliance manufacturer, said it is reviewing its short-term sales targets and monitoring volatile foreign exchange rates and prices of raw materials on a real-time basis to manage currency risk and better cope with external economic changes.
The company, however, said it will still invest 4.8 trillion won in research and development as scheduled.
South Korean shipbuilders predicted the European financial turmoil would be unlike the U.S.-led global financial crisis in 2008, which took a serious toll on demand and led to losses, sources said. However, European orders for ships or offshore plants could shrink if the situation does not turn around in the short-term, they added.
Local builders were not overly pessimistic about Italy's rating cut as they are not deeply involved in the European market. Moreover, they look forward to seeing sales increase on the back of a weaker local currency and anticipate opportunities to purchase ailing construction companies in Europe.
"In the short-term, it will be good for us that our competitors stumble, but a contraction in markets can lead to fiercer competition to win orders and pose a threat to the industry," said an official from a construction company.
"Italy's downgrade has already been reflected in the market, although it may affect broader investment sentiment," said an official from the Federation of Korean Industries, the country's biggest lobby group. "The government should scrutinize the financial and economic markets to minimize the impact of the European situation."
Executives of top automaker Hyundai Motor Co. and its smaller affiliate Kia Motors Corp., led by the group's Chairman Chung Mong-koo, are heading to the companies' European plants and sales points to check production facilities and attempt to bolster sales to counter effects of the continuing crisis.
Hyundai Motor Group said it will focus on high efficiency vehicles such as its new mid-size wagon i40 to appeal to belt-tightening European consumers, hoping to turn the crisis into an opportunity to tap deeper into the European market.
According to industry data, the two companies sold a combined 45,911 units in August for a market share of 5.9 percent. This surpassed the companies' previous record of 5.2 percent reached in August 2010 and in April 2011.
Electronic firms are also keeping close tabs on the European market to prepare for a worsening situation, where the fiscal problems could translate into an economic recession.
Samsung Electronics Co., South Korea's leading home appliances and mobile handset maker, is concerned that the downgrade of Italy's sovereign rating and a prolonged Greek debt crisis will threaten growing sales in Europe as the impact sweeps through the region. Samsung Electronics posted 36.1 trillion won (US$31.4 billion) of sales in Europe last year, accounting for 23.3 percent of the 154.6 trillion won worth of products it sold.
LG Electronics Inc., the country's No. 2 electronic appliance manufacturer, said it is reviewing its short-term sales targets and monitoring volatile foreign exchange rates and prices of raw materials on a real-time basis to manage currency risk and better cope with external economic changes.
The company, however, said it will still invest 4.8 trillion won in research and development as scheduled.
South Korean shipbuilders predicted the European financial turmoil would be unlike the U.S.-led global financial crisis in 2008, which took a serious toll on demand and led to losses, sources said. However, European orders for ships or offshore plants could shrink if the situation does not turn around in the short-term, they added.
Local builders were not overly pessimistic about Italy's rating cut as they are not deeply involved in the European market. Moreover, they look forward to seeing sales increase on the back of a weaker local currency and anticipate opportunities to purchase ailing construction companies in Europe.
"In the short-term, it will be good for us that our competitors stumble, but a contraction in markets can lead to fiercer competition to win orders and pose a threat to the industry," said an official from a construction company.
"Italy's downgrade has already been reflected in the market, although it may affect broader investment sentiment," said an official from the Federation of Korean Industries, the country's biggest lobby group. "The government should scrutinize the financial and economic markets to minimize the impact of the European situation."
