Samsung Electronics Co and Hyundai Motor Co, South Korea’s largest companies, told employees to brace for intense competition in a weak global economy as the government called for contingency planning.
“The global economy’s low-growth trend will continue and uncertainty surrounding the business environment won’t be easily removed,” Samsung chairman Lee Kun-hee said, according to a summary of a speech to employees yesterday that was distributed by the company. “We should make our corporate culture more open, flexible and innovative.”
Samsung will this year focus on developing new products and tapping new businesses to get ahead of competitors amid the global economic slowdown, Lee said.
The maker of televisions, computer chips and mobile phones and affiliated Samsung Group companies had combined sales in 2010 equivalent to one-fifth of South Korea’s GDP.
Hyundai said yesterday it aims to sell a record 7 million cars worldwide this year by strengthening production and sales abroad to outpace competitors amid the global slowdown.
“The auto industry in 2012 is expected to show slow growth and intense competition between companies,” Chung Mong-koo, chairman of Hyundai and its affiliate, Kia Motors Corp, said yesterday in a New Year speech to workers in Seoul.
The group sold 6.6 million cars worldwide last year, Chung said, adding its 30 overseas plants in nine countries, including new factories in Beijing and Brazil, would reach full capacity this year.
Exports from Asia’s fourth--largest economy could grow 6.7 percent this year from 19.6 percent last year, according to government forecasts.
Security risks from a leadership change in North Korea are adding to uncertainties for the South as European leaders struggle to hold their monetary union together in the face of credit downgrades and a looming recession.
“South Korea’s economy is facing increased uncertainties this year, and the global economy may rapidly deteriorate if the European debt crisis worsens,” South Korean Finance Minister Bahk Jae-wan said in a New Year statement released yesterday. “Contingency plans to prevent contagion from Europe’s crisis should be strengthened.”
South Korean President Lee Myung-bak said yesterday he would focus in the coming year on reducing inflation and bringing down unemployment by investing over 10 trillion won (US$8.6 billion) in creating jobs. The government’s goal is to get inflation down to the low 3 percent range, he said. Consumer prices rose 4.2 percent last month.
Bahk said that while the European debt crisis might reach its peak in the first half of the year, the global economy could rapidly deteriorate if the situation -worsened. The government would work to support households, companies and financial markets, he said.
South Korea’s economy could expand 3.7 percent this year, from 3.8 percent last year, according to the central bank.
“Compared to the last two years, the growth target is conservative,” said Park In-woo, an analyst at LIG Investment & Securities Co. “This may come from the grim economic outlook, but more so, Hyundai is planning to take this year to focus on internal management such as quality control.”
Demand for Hyundai’s Sonata sedan and Kia’s Sportage sports utility vehicle helped the companies boost global sales last year as Japanese rivals were hampered by a strong yen and suffered from production disruptions after the March earthquake and Tsunami and record flooding in Thailand.