Hyundai sees sales rise as Toyota faces recall woes

HYUNDAI yesterday announced a sharp rise in February sales, benefiting from recall woes at rival Toyota, which planned aggressive incentives to win back US customers.

The South Korean firm’s sales rose to 34,004 from 30,621 last year. So far this year, sales are up 17 per cent to 64,507 from 55,133.

Toyota’s recalls, totalling 8.5m vehicles globally due to uncontrolled acceleration and braking glitches, have hurt its reputation for quality and shone a spotlight on vehicle safety issues.

Data released earlier this week showed car sales rose sharply in February in France, Italy and Spain as scrappage programmes lifted business, but the European carmakers are set to face tougher times ahead as governments phase the schemes out.

While France’s scrapping incentive is in place until the end of 2010, Italy said last month that it would not renew its scheme, Germany’s ran out in early September and the UK’s ends this month.

Car sector executives gathered in Geneva for the annual auto show spoke of a challenging market at best in Europe this year, with Germany looking especially gloomy after the country was one of the first to end its scrappage programme.

“The (German) market this year will be down 25-30 per cent” said Philippe Varin, chief executive of PSA Peugeot Citroen. He said the company was assuming a nine per cent fall in Europe as a whole this year.

l Beyond Europe, GM, the largest US automaker, was expected, like Hyundai, to have benefited from Toyota’s recalls, but now faces its own problem, albeit a smaller one.

The company is voluntarily recalling 1.3m vehicles in North America to fix a power steering problem linked to 14 crashes and one injury. It yesterday blamed a supplier partly owned by Toyota for the recall.

GM vice-chairman Bob Lutz said the supplier, JTEKT –?a joint venture between Toyoda Machine Works and Koyo Seiko –?had not met “all requirements for reliability and durablity.”