FRANKFURT (Reuters) -- Hyundai Motor's European operations will likely need to defer its mid-term sales and market share targets due to a dismal outlook for overall demand that is now starting to worry the stronger carmakers as well as the weak.
"I suspect the whole plan of selling 500,000 cars next year and achieving 5 percent market share in 2015 is being deferred by one year to be realistic, because the market decline exceeded our expectations," said Allan Rushforth, chief operating officer of Hyundai Motor Europe in an interview. "So 2013 should give us half a million with the 5 percent achievable in 2016 at the earliest."
For the current year, Hyundai is aiming for a 3.5 percent share of the European market with a slight increase of 0.1 or 0.2 percentage points in the following one.
Plunging car sales in key markets such as Italy, where demand has reached lows not seen in decades, have led to carmakers such as General Motors' Opel, PSA/Peugeot-Citroen and Fiat to recording heavy losses at their European operations.
In the past few weeks, automakers, including Volkswagen and Mercedes-Benz, that had so far successfully navigated the crisis, have warned that demand is shrinking at a rate they had not foreseen.
While brands such as Porsche have said they will protect high profit margins by investing less and delaying the odd project, Hyundai Europe aims to ramp up spending to promote the brand and keep it memorable with potential customers.
"Eight out of 10 people cannot spontaneously recall our brand in marketing studies so we've drafted a brand strategy for Europe which will be presented to headquarters in mid-October," Rushforth said.
"Historically over the last five years customer retention has been in the bottom quarter (among carmakers in Europe). We've been very much a stepping stone, but we are starting to reverse the tide," the COO added.
According to data from industry organization ACEA, Hyundai's market share in EU and EFTA markets rose from 2.9 percent to 3.4 percent in the first eight months. In the same period, the automaker sold 291,276 cars, a rise of 10.6 percent over 2011.
Automotive News Europe contributed to this report