South Korean automakers Hyundai Motor Co. and Kia Motors Corp. are forecast to post record sales in the final three months of the year on increased production and growing overseas demand, analysts said Thursday.

“Hyundai and Kia will likely expand production in local plants by encouraging overtime work until the end of the year, with their overseas factories growing steadily,” said Lee Hyung-sil, an analyst from Shinyoung Securities Co.

“Their factories will continue to operate at full capacity as Hyundai and Kia have very low inventories abroad, and their competitiveness has improved.”

Hyundai and Kia, the flagships of world’s fifth-largest automotive group Hyundai Motor Group, suffered production lapses in August and September due to frequent strikes by their unionized workers.

Analysts expect the two carmakers’ earnings for the July-September period would have worsened due mainly to the production losses at their local plants.

“The strikes cost the carmakers an estimated 82,000 vehicles, lowering operating rates of domestic and overseas plants to 80 percent and 97 percent, respectively,” said analyst Song Sun-jae from Hana Daetoo Securities Co.

Hyundai’s global sales fell 4.6 percent on-year in August and Kia posted a 0.5 percent drop in sales in August when the walkouts peaked.

Their sales showed signs of recovery in September, however, after both companies concluded wage deals with their labor unions early last month. Hyundai saw a 3.4 percent rise in September sales, and Kia’s sales climbed 0.6 on-year.

Song also noted that Hyundai and Kia will complete plants in China and Brazil and adopt a three-shift working system at its U.S. assemblies to boost production.

“The expansion of overseas production lines will also ease a supply shortage. This will lead to a sharp increase in sales next year,” said Song.

Korea Investment & Securities Co. said the recent massive recall of Toyota Motor Corp. vehicles in the United States, Europe and Japan will likely help Hyundai and Kia sell more vehicles in the coming months.

“Toyota decided to recall some 7.4 million vehicles throughout the world due to a power-window switch defect. Sales of Hyundai and Kia are expected to increase further,” said Seo Sung-moon, a researcher at the brokerage firm. 

(Yonhap News)