South Korea's Hyundai, Kia expect slowest sales growth in 10 years

1 of 6. The logo of Hyundai Motor is seen on a car displayed at a Hyundai dealership in Seoul in this July 1, 2011 file photo. South Korea's biggest automakers Hyundai Motor Co and affiliate Kia Motors Corp are targeting a 4 percent increase in global sales in 2013 to a combined 7.41 million vehicles, their slowest growth since 2003.

Credit: Reuters/Truth Leem/Files

By Hyunjoo Jin

SEOUL | Tue Jan 1, 2013 8:04pm EST

SEOUL (Reuters) - South Korea's biggest automakers Hyundai Motor Co (005380.KS) and affiliate Kia Motors Corp (000270.KS) are targeting a 4 percent increase in global sales this year to a combined 7.41 million vehicles, their slowest growth since 2003.

The duo, which together ranks fifth in global car sales, is bracing for more modest growth after years of expansion at breakneck speed. Group chairman Chung Mong-koo has slowed capacity building to focus on improving branding and profitability in the hopes of better competing with rivals that include Japan's Toyota Motor Corp (7203.T).

Hyundai Motor and Kia will pursue brand innovation by raising the quality of our vehicles, Chung, the 74-year-old chairman of Hyundai Motor and Kia's parent group, said in his annual speech to employees on Wednesday.

In line with that strategy, Kia promoted chief designer and executive vice president Peter Schreyer - known for his design contributions to the iconic Audi TT - to president late last week.

Earlier in 2012, Hyundai Motor poached ex-BMW designer Christopher Chapman to head its U.S. design center.

"Chairman Chung said our maximum capacity is 8 million vehicles. No more than that. Instead, he said we need to move upmarket and raise margins," a former top Hyundai executive told Reuters.

Hyundai Motor plans to unveil a luxury-concept vehicle at the upcoming Detroit motor show, a spokesman said, without elaborating.

The auto maker targets sales of 4.66 million vehicles this year, while Kia has set a goal of 2.75 million, according to regulatory filings.

RISING WON

But investors are concerned that growth momentum will wane with Hyundai Motor and Kia's go-slow strategy and the firming South Korean won.

Hyundai and Kia's industry-leading margins are being threatened by the strengthening won, which reduces repatriated earnings and pricing power. The South Korean currency rose 7.6 percent against the dollar last year, its biggest percentage gain since 2009.

By contrast, the yen is softening, which could tip the competitive balance in favor of their Japanese rivals such as Honda Motor Co Ltd (7267.T).

Reflecting those concerns, shares in Hyundai Motor rose 2.6 percent in 2012 while Kia shares slumped 15.3 percent, underperforming the wider market's .KS11 9.4 percent gain.

Hyundai and Kia were the worst performing stocks among the world's top five automakers last year, according to Thomson Reuters data.

A dearth of new models for Hyundai Motor and Kia this year may also erode sales growth, analysts say.

The next generation of Genesis, Hyundai Motor's premium sedan, may be unveiled only in late 2013.

Kia Motors plans to launch a new Soul compact car this year, a spokesman said, without elaborating on possible rollout plans for other models.

PREVIOUS TARGET

Hyundai Motor and Kia sold a combined 7.12 million vehicles in 2012, up 8 percent from the previous year and better than their original target of 7 million.

The duo drove up sales in China when their Japanese competitors were hit by a backlash in a dispute over islands in the East China Sea last year.

In the United States and Canada, Hyundai Motor and Kia's sales have not been greatly affected so far by their November 2 admission that they had overstated the fuel economy of more than 1 million cars.

Hyundai Motor, which started new plants in China and Brazil in 2012, is in a better position to increase sales this year than Kia, which did not add any capacity at all last year.

The companies plan to release their global sales results for December later on Wednesday. Figures for the United States are due on Thursday.

(Additional reporting by Daum Kim in SEOUL; Editing by Ryan Woo and John Mair)

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Revellers gather in NY's frigid Times Square on New Year's Eve

Revelers fill Times Square during a celebration to mark the start of the new year in New York December 31, 2012.

Credit: Reuters/Gary Hershorn

By Peter Rudegeair and Greg Roumeliotis

NEW YORK | Tue Jan 1, 2013 10:34am EST

NEW YORK (Reuters) - Throngs of Revellers in and around New York's Times Square bid farewell to 2012 and extended a raucous greeting to 2013 early Tuesday.

The crowd in midtown Manhattan, which police expected to approach 1 million, cheered and counted down the final seconds of 2012 as a large lighted crystal ball descended for the last minute of the old year - a tradition started in 1907.

Thousands cheered as the new year officially began and a blizzard of colourful confetti fell on the famous square. But the cheers - and a spirited crowd rendition of the song "New York, New York" - were quickly drowned out by a fireworks show.

Paul Hannemann, the head of an incident response team at the Texas Forest Service, was in New York to help with the reconstruction efforts in areas hit by Superstorm Sandy.

Even as he spent his first New Year's Eve in Times Square, Hannemann's thoughts were on Washington, D.C., where lawmakers worked late into the night to reach a deal to avoid the so-called fiscal cliff of automatic tax hikes and spending cuts that many economists fear could send the nation back into recession.

"I hope everybody can come together in 2013 so our country can get its finances in order and our economy back in place," Hannemann, 60, said.

In addition to the crowd on hand in Times Square, another billion people were expected to watch on television, city officials said.

People filled pens in the centre of Times Square hours before the end of 2012. Police set up barricades to keep away the overflow crowd. Once people entered the police pens, they were not allowed to leave, no alcohol was permitted and there were no restrooms.

At 6 p.m. the ball rose to the top to the top of its 70-foot (21-meter) pole and fireworks went off.

A few minutes earlier, the cheering crowd turned silent when the ceremony released balloons for each of the victims of the December 14 elementary school shooting in Newtown, Connecticut.

Mark Barrigan, a medical software product manager, traveled from Dallas to witness the ball drop live for the first time this year, fulfilling a longtime wish.

"It was one of those bucket list items," Barrigan said, referring to a list of activities people plan to do before they die.

Asked what he was hoping for in the new year, Barrigan replied, "Hopefully they'll make some good decisions in Washington, D.C."

Elsewhere in America, same-sex marriage became legal at 12:01 a.m. in Maryland.

Maryland, Maine and Washington state became the first three U.S. states to approve gay marriage by popular vote on November 6. Nine states and the District of Columbia now have statutes legalizing gay marriage.

FREEZING TEMPERATURES

The temperature in Times Square was predicted to hover just above freezing around midnight, with a possibility of rain or snow flurries, forecasters said.

The Revellers came for the people-watching for which Times Square is famous, and to see performers such as Taylor Swift, Psy, Carly Rae Jepsen and Neon Trees.

"For me, 2013 is about leaving everything behind and starting from scratch," said Mara Trevin, a 26-year-old who moved from Buenos Aires to New York last week to start a new life.

"That's my resolution."

The illuminated, crystal-covered ball - some 12 feet (3.7 metres) in diameter and weighing nearly 12,000 pounds (5,443 kg) - began its descent on schedule at 11:59 a.m. EST, dropping 70 feet (21 metres) in 60 seconds.

One of those crystals was engraved with the name of Dick Clark, the American entertainer who hosted a popular television presentation of the Times Square New Year's celebrations for decades.

He died in April of a heart attack. Clark had suffered a stroke in 2004 that sidelined from the New Year's Eve show for the first time since he launched the annual broadcast in 1972.

But he gamely returned to the program the following year, and had continued to announce the annual countdown to midnight.

As part of the city's New Year's Eve celebration, more than one ton of confetti was to be released from the rooftops of surrounding buildings in Times Square.

The end-of-the-year crowds capped a year in which 52 million people visited New York City, the third straight record-breaking year for tourism, city officials said on Monday.

More than a million additional tourists visited the city in 2012 compared to 2011, a 2.1 percent increase, they said.

The first version of the ball in Times Square descended in 1907 from a flagpole. (Additional reporting by Joshua Lott; Editing by Daniel Trotta, James B. Kelleher, David Gregorio, M.D. Golan and Eric Walsh)

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Top Goldman Sachs execs get shares on New Year's Eve

Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group, delivers remarks at an event sponsored by the Economic Club of Washington in Washington, July 18, 2012.

Credit: Reuters/Jason Reed

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Mexican farmers suffer worst drought in 70 years

1 of 2. A farmer herds his goats in San Jose de la Paila in the state of Coahuila November 24, 2011.

Credit: Reuters/Stringer

By Noe Torres

MEXICO CITY | Fri Nov 25, 2011 8:57pm EST

MEXICO CITY (Reuters) - Mexico is being battered its worst drought in seven decades, which has devastated farm life and is expected to continue into next year.

The lack of rainfall has affected almost 70 percent of the country and northern states like Coahuila, San Luis Potosi, Sonora, Tamaulipas and Zacatecas have suffered the most acute water shortage.

Due to the drought and a cold snap at the start of the year, the government has cut its forecast for corn production two times in 2011. It now expects a harvest of 20 million tonnes compared to a previous estimate of 23 million.

Crops that cover tens of thousands of acres have been lost this year and roughly 450,000 cattle have died in arid pastures. Crucial dams, typically full at this time of year, are at 30 to 40 percent of capacity.

"This is very serious," Ignacio Rivera, an official at the Ministry of Agriculture and Rural Development, told Reuters. "Statistics on precipitation in the country show us that this year has been the driest in the last 70 years."

The country has total arable land of 22 million hectares (54.4 million acres) that can be tilled over two planting seasons while the national cattle herd last year was just over 32.6 million.

Mexico is one of the world's five top corn producers and the government expects output to recover to 25 million tonnes in 2012, aided by reorganization of the cultivated areas.

Rivera said that of the 8.1 million hectares of farmland insured by the government against natural disaster, some 600,000 claims have been lodged to recover losses on 3.8 million hectares. The Mexican government has so far set aside some 1.6 billion pesos ($113 million) to cover the losses.

TROUBLING PICTURE

Forecasts do not signal any near-term relief, but rather more losses ahead as the winter season brings damaging frost.

"It's a troubling situation, and is more worrisome because the rainy season is over... the hope is that by June it starts to rain," said Felipe Arreguin, deputy director of the National Water Commission (Conagua).

In the northern state of Durango, where a third of the population lives in the countryside, authorities expect significant losses in grain and seed production as well as bean and corn, which are a staple in the Mexican diet.

"It's a tragedy because there is virtually no harvest. It's a critical situation that we don't even have beans for home consumption," the state governor Jorge Herrera told Reuters.

Official figures show an expected 28 percent loss in production of beans this year, while the recovery to historical levels of 1.2 million tonnes will depend on the weather.

If the drought does not lift soon, analysts say authorities will be forced to raise its food imports to cover lower domestic production.

(Additional reporting by Adriana Barrera; Editing by Marguerita Choy)

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The year's best-performing retail stock is nothing like the second best-performing

Pretty interesting chart from Deutsche Bank retail guru Charles Grom showing the performance of various retailers this year.

At first blush, it's not that easy to divine a pattern.

The #1 performing stock is Dollar Tree (ultra-low end). The next best stock though is Whole Foods (ultra-high end). The next one is another dollar store. Wal-Mart is up, while Target is down. Nordstrom (JWN) is up, while Saks (SKS) is down.

It seems the one place you don't want to be is the middle (Target), as both the high end and the low end have done best.

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