Brokers cross off Hyundai Motors

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Brokers cross off Hyundai Motors

Most Korean brokerages painted a pessimistic future for Hyundai Motor Co., the nation’s top automaker, citing persistent labor disputes, currency appreciation, and opaque management practices, an analyst said yesterday.
Woori Investment and Securities Co. analyst Ahn Soo-woong said in a report that only two out of 10 local brokerages surveyed rated Hyundai Motor’s outlook as “positive.” The report was released at an industry forum sponsored by the Korea Automobile Manufacturers Association on the same day.
“Questions abound over whether Hyundai Motor can survive and compete against global rivals amid the Korean currency’s sharp gain and weak sales at home,” the analyst said. “Under the current circumstances, the market’s judgment is that Hyundai Motor has no future,” the analyst said.
Last week, prosecutors demanded a six-year jail term for Hyundai Motor chairman Chung Mong-koo, who was indicted for embezzlement and breach of trust.
The 69-year-old chairman was arrested last April on alleged charges of raising and spending slush funds worth about 70 billion won ($74 million).
Mr. Chung, who was released on bail in June after spending two months in jail, awaits a verdict and sentencing on Feb. 5. Besides Mr. Chung’s opaque management style, the automaker struggles with annual labor strikes and the increasingly stronger won.
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