Many South Korean companies are having a hard time formulating their business strategies for the second half of this year. This is because the U.S.-China trade war is ongoing, both exports and domestic consumption are sluggish, and Japan’s economic retaliation is adding to their difficulties.
Earlier, Hyundai Motor Group raised its annual global sales goal by approximately 50,000 cars to 7.6 million units. However, the group sold 3.48 million cars, 46 percent of the goal, in the first half of this year. SsangYong Motor Co. recently lowered its goal for this year from 163,000 vehicles. The company sold 70,277 cars in the first half, which represented 43 percent of its annual goal. GM Korea’s and Renault Samsung Motors’ first-half performances fell 6.2 percent and 31.9 percent from a year ago, respectively.
Semiconductor manufacturers such as Samsung Electronics and SK Hynix and display manufacturers such as Samsung Display and LG Display are taking a direct hit from the Japanese government’s raw material export restrictions that started early this month. With the global semiconductor industry showing no signs of recovery, SK Hynix recently initiated cost reduction programs in some of its teams and Samsung Display recently put on hold its investment in OLED TV panel production lines.
Hyundai Heavy Industries Group, the largest company in the South Korean shipbuilding industry, received orders with a combined value of US$3.4 billion in the first half, 19 percent of its goal for this year. The figures are US$2.78 billion and 33.2 percent and US$3.2 billion and 41 percent when it comes to Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, respectively.
Construction companies are adjusting their goals, too. HDC Hyundai Development Company planned to sell 6,000 houses yet actually sold 3,300 in the first half. The figures are 12,000 and 6,500 as for GS E&C.
SK Telecom, KT and LG U+ are following suit as well. “The companies put forward their investment with regard to 5G service quality issues and their marketing expenses soared with competition heating up,” said a telecom industry insider, adding, “Their profitability is likely to deteriorate in the second half, which means they are likely to revise their business plans.”