Shares of Hyundai Motor Co and Kia Motors Corp, South Korea's two largest automakers, fell as investors are worried wage disputes with workers and a stronger won will hurt earnings.
Hyundai Motor shares fell as much as 5.9 percent to 35,650 won, the lowest intraday level in more than three months. Shares of Kia, an affiliate of Hyundai Motor, dropped 5.8 percent to 9,800 won, the lowest intraday level in more than four months.
Hyundai Motor faces more strike threats after its union rejected a wage proposal on Friday, while Kia workers went on a three-hour strike yesterday.
Carmakers are struggling to keep up with demand after a domestic consumption tax cut and rising sales of new models abroad. Investors are also concerned that the strength of the won will undermine earnings growth at Hyundai Motor and Kia Motors this year.
"Investors are worried that the stronger won will cut into Hyundai Motor's profits from sales in the US," said Han Sang-soo, who manages 400 billion won (US$330 million) at Daehan Investment Trust Management Co. "Investors are overreacting and investors should rather start buying Hyundai Motor shares," Han said.
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