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SEOUL (Reuters) - Hyundai Motor (005380.KS) and affiliate Kia Motors (000270.KS) aim to boost global vehicle sales by 6 percent this year to a combined 7 million units, which would mark a slowdown for a duo that has enjoyed double-digit sales rises in recent years.
"I expect the automotive industry to see growth slowing because of the European debt crisis and the global economic slowdown, while competition is expected to intensify among automakers this year," Chung Mong-koo, chairman of Hyundai and Kia's parent group, said in his annual speech to employees.
He did not give a breakdown of Hyundai and Kia's individual sales targets.
The world's fifth-biggest automotive group has been an outperformer especially during the global financial crisis, but South Korean carmakers are bracing for macroeconomic uncertainty and rising competition.
Japanese rivals are reviving from output losses caused by natural disasters in Japan and Thailand last year, while a free trade deal with the United States is set to take effect early this year and cut tariffs on U.S. auto imports in South Korea.
Stretched production capacity is also preventing Hyundai and Kia from sharply boosting sales.
The duo sold 6.6 million vehicles in 2011, up 15 percent from the previous year.
Hyundai plans to start production at its third Chinese plant and its first factory in Brazil in 2012, while Kia has no new plants beginning operations this year.
Hyundai plans to launch a fully revamped version of the Santa Fe SUV and a Brazil-dedicated model, the HB, in 2012. Kia is set to roll out large-sized sedan K9 and an all-new Cee'd this year, and is also discussing the launch timing of a fully revamped Forte compact.
Shares in Hyundai Motor jumped 23 percent and Kia gained 32 percent last year, far outperforming the wider market's .KS11 11 percent fall.
Reporting by Hyunjoo Jin; Editing by Jonathan Hopfner