China stops subsidies to vehicle buyers in rural areas starting today

The Chinese government will end subsidies for vehicle sales in rural areas starting today, three days after announcing a halt in incentives for buyers of small vehicles.

The incentives being stopped in rural areas include those for small cars and trucks, the Ministry of Finance said in a statement on its website today. That will end a policy started in March 2009 to foster automobile demand at the height of the global recession.

The government said Dec. 28 said it will raise the sales tax on vehicles with engines of 1.6 liters or smaller to 10 percent from its current 7.5 percent. The tax was 5 percent last year.

Policies including a consumption-tax rebate, subsidies for rural car buyers and incentives of up to 18,000 yuan to trade in older models helped China’s total vehicle sales jump 46 percent last year. The nation overtook the U.S. to become the world’s biggest automobile market.

China’s vehicle sales may reach 20 million units in 2011, according to Bill Russo, a Beijing-based senior adviser at Booz& Co.

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Porsche wins dismissal of fund suits over VW shares

Porsche Automobil Holding SE won dismissal of two lawsuits over claims the company cost hedge funds more than $2 billion when it misled short-sellers in its acquisition of Volkswagen AG shares in 2008.

U.S. District Judge Harold Baer in Manhattan today dismissed the complaints filed by hedge funds Elliott Associates LP and Black Diamond Offshore and representing a total of 39 U.S. and foreign-based funds. The suits accused Stuttgart, Germany-based Porsche of secretly cornering the market in Volkswagen shares.

The short sellers claimed that Porsche misled investors by denying through much of 2008 that it intended to acquire Volkswagen and by using manipulative trades to hide its stock positions. Porsche said on Oct. 26, 2008, that it controlled most of Volkswagen’s common stock, causing the shares to surge as short sellers raced to cover their positions.

In his opinion, Baer said he relied on a recent U.S. Supreme Court ruling that fraud claims such as those in the suits against Porsche apply only to securities listed on domestic exchanges and domestic transactions in other securities. Baer said his ruling today applies to other similar complaints against Porsche.

‘Functional Equivalent’

The swaps at issue in the case“were the functional equivalent of trading the underlying VW shares on a German exchange,” Baer wrote.“Accordingly, the economic reality is that plaintiffs’ swap agreements are essentially transactions conducted upon foreign exchanges and markets and not domestic transactions.”

Porsche took another step toward its planned merger with Volkswagen, based in Wolfsburg, Germany, and Europe’s largest carmaker, after the company’s shareholders on Nov. 30 backed a 5 billion-euro stock sale to lower debt. The sports-car maker agreed to combine with VW in August 2009 after a failed attempt by Porsche to gain control of VW.

The court also dismissed claims against Porsche SE’s former chief executive officer, Wendelin Wiedeking, and its former chief financial officer, Holger Harter. Porsche announced the ruling in an e-mailed statement today without commenting on it.

David Parker, a lawyer representing Elliott Associates, didn’t immediately return a call seeking comment after business hours.

The case is Elliot Associates, Black Diamond Offshore, Ltd. v. Porsche Automobil Holding SE, 10-0532, U.S. District Court, Southern District of New York.

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JAC to export 620,000 cars to Brazil in next 10 years

Chinese carmaker Jianghuai Automobile Co.,Ltd. (JAC) started shipping the first batch of 500 cars to Brazil on Tuesday.

It signed a deal in August to export 620,000 ethanol-powered cars to Brazil in the next 10 years.

In a statement on Wednesday, the company said it will send the second and third batches, 1,500 and 2,500 cars respectively, in January and February next year.

In August, the company announced it signed the Exclusive Distributor Agreement with Brazilian dealer SHC.

JAC Motors, among the top 10 Chinese carmakers, sought to break into the world No.4 auto market that has been long dominated by US and European automakers and has a high entry threshold.

She Cairong, deputy general manager of JAC Motors, said:"We should continously broaden our global vision to gradually compete with global auto giants."

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Federal-Mogul recalls parts in some Chrysler vehicles

Federal-Mogul Corp is recalling 22,689 replacement control arm assemblies in certain older model Chrysler vehicles after it found a fault that could cause vehicles to crash.

The Michigan-based auto parts supplier said a part of the assembly, a ball stud, could wear through the assembly housing, causing the driver to lose steering control, said a notice filed with the U.S. National Highway Traffic Safety Administration.

The control arm assembly is the main link between the vehicle frame and the wheels and allows the wheels to go up and down independently of the chassis.

While more than 22,000 assemblies have been recalled, Federal-Mogul said it was not sure how many vehicles are affected by the recall.

Federal-Mogul spokesman Jim Burke said the number of these parts in each vehicle depends on the type of suspension, but usually is one or two per wheel.

The recall affects six Chrysler-brand vehicles from the model years 1995 to 2006. It includes the Chrysler Sebring convertible and the Chrysler Sebring sedan for the model years 1996 to 2006.

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JAC plans to invest $4.5 mln in EV project

Shanghai December 7 (Gasgoo.com) Anhui Jianghuai Automobile Co., Ltd. (JAC) announced yesterday that it plans to invest 29.8 million yuan ($$4.5 million) in verification equipment for pure electric vehicle R&D, 163.com reported Tuesday.

JAC will consolidate and develop its core business, the light truck and the Refine commercial vehicle, and bolster development of sedans, its strategic business, and take the initiative in developing new energy vehicles in the next five years, the company said in a statement.

Always adhere to the principle of"best quality and efficiency, and of building brands on quality", JAC said it will make itself a major automaker in China with relatively strong international competitiveness in five to ten years.

The company aims to boost annual sales to 1.3 million vehicles, generating sales revenue of 89 billion yuan by 2015, and to gradually increase the figures to 1.6 million and the sales revenue to 112 billion yuan. 
 

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Chery DR3 to enter European market next June

Chery DR3, a four-door hatchback car mirrored on Chery Fulwin2, will stage on the Bologna Auto Show from December 4 to 12, and will enter the European market in June next year.

With 1.5-liter/4-cylinder engine and a 5-gear manual transmission, the DR3 has a maximum horsepower of 108, and will sell at 53,000 yuan ($7,800) in China.

The DR1, based on Riich M1 electric car, will also be shown at the show. It is equipped with 40-kilowatt electro-motor and iron-phosphate-based lithium-ion batteries, which can be fully charged by a 220-volt voltage within six to eight hours. Riich M1's maximum speed is 75 miles per hour, and its mileage 100 miles. In China, Riich M1 sells at 150,000 yuan ($22,500).

Although Italian auto importers first showed standard gasoline-powered DR1 on the Bologna Auto Show 2008, there is no official confirmation it will enter the European

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Toyota China sales up 17% in November

Toyota currently has two joint venture partnerships in China, one in the north with First Automobile Works (FAW) and one in the south with Guangzhou Auto Company (GAC), the two JV’s are in a perfect position in which to cover the major geographical bases in China, this method seems to be paying off quite well for Toyota who have announced that sales have increased by 17% in November after a sales drop in October.

A total of 82,900 Toyota vehicles were sold in November 2010 which is a year on year increase of 17% over November 2009′s figures, October 2010 was a poor month for Toyota when they saw their first sales drop in 18 months, although yearly sales for Toyota are at 726,500 units in the first 11 months.

In 2011 Toyota is going to have a major focus on small displacement vehicles which have so far been driving the big sales figures in the Chinese market, the Toyota Verso will launch at the Guangzhou Auto Show and will be powered by a 1.6L engine, making it the third small displacement car on offer from Toyota in China.

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Renault Fluence EV goes for test run in China next year

Shanghai December 3 (Gasgoo.com) Renault will deliver a small number of Fluence EVs into China in 2011 to test the market, saying large volume delivery will need to be further discussed due to the lack of supporting infrastructure, the Beijing Times reported Friday, citing Chen Guozhang, CEO of Renault Greater China.

It is reported that orders for 200 Fluence EVs have been received from China since the French automaker unveiled the car at the 2010 Paris Auto Show. Five Fluence EVs will be shipped to China next year for test drive. Renault and Nissan will jointly develop plans for electric vehicles. 

The Fluence EV, based on the Fluence Z.E. Concept, has both standard and rapid-charge capability and can be recharged through"QuickDrop" battery exchange, Renault said. The standard Fluence has 1.6- and 2.0-liter gasoline engines and a choice of five variants of the 1.5-liter diesel.

Renault Greater China will hold a meeting this week to analyze the development of electric vehicles in China for the sake of formulating more specific development programs in the future, Chen said.

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Renault Fluence EV to test China market next year

Shanghai December 3 (Gasgoo.com) Renault SA will deliver a handful of Fluence EVs into China in 2011 to test the market, saying large volume delivery will need to be further discussed due to the lack of supporting infrastructure, the Beijing Times reported Friday, citing Chen Guozhang, CEO of Renault Greater China.

It is reported that orders for 200 Fluence EVs have been received from China since the French automaker unveiled the car at the 2010 Paris Auto Show. Five Fluence EVs will be shipped to China next year for test drive. Renault and Nissan will jointly develop plans for electric vehicles. 

 The Fluence EV, based on the Fluence Z.E. Concept, has both standard and rapid-charge capability and can be recharged through"QuickDrop" battery exchange, Renault said. The standard Fluence has 1.6- and 2.0-liter gasoline engines and a choice of five variants of the 1.5-liter diesel.

Renault Greater China will hold a meeting this week to analyze the development of electric vehicles in China in order to formulate more specific development programs in the future, Chen said.

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China's auto growth rate may slip to 10%

A market analyst with American consulting service company, J.D. Power said Monday that the growth rate of the Chinese auto market will slow down in the coming year, as a result of the government's plan of canceling the preferential policies and the aggressive growth rate in 2009 and 2010, the China Business News reported.

A report released by J.D.Power predicted that the total volume of the Chinese car market will reach 18 million units, increasing 30 percent but the growth rate in 2011 will slip to 10 percent.

Ding Lei, chairman of SAIC-GM said the increasing rate of the Chinese auto market will keep the momentum of steady growth in the next five to 10 years and it will not change greatly in 2011: 20 percent or so.

Under this circumstance, China surpassed the US, becoming the world's biggest car-consuming country with a growth rate of 47 percent in 2009.

However, the government has realized the problems caused by the over-rapid growth, including traffic congestion, environmental pollution and automakers' over expansion, Zhu Ming, analyst with J.D. Power said.

Gan Weiwen, director of GM China said that the growth rate in 2011 will be 10 to 15 percent, which may have negative impacts on domestic automakers, especially those mini and micro car manufacturers.

According to J. D. Power's statistics, the capacity utilization rate of domestic automakers reaches 88 percent in 2010 and will drop to 10 percent in 2011.

"Even if the capacity utilization rate is under 75 percent, Chinese self-owned brands could still keep earning, so domestic automakers are not likely to face huge losses the next year," Zhu said.

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Rolls-Royce pushes $990,000 cars among China's new rich

Rolls-Royce Motor Cars Ltd., Bayerische Motoren Werke AG’s ultra-luxury nameplate, plans to sell 800 cars in China in 2011 as it aims to raise sales eightfold in two years in the world’s largest auto market.

The automaker delivered almost 500 cars in China in the first 10 months of 2010, compared with about 100 for the whole of last year, Paul Harris, the company’s Asia Pacific regional director, said in an interview on Nov. 26. Rolls-Royce includes Hong Kong in its China sales.

The luxury marque, which competes with Volkswagen AG’s Bentley and Daimler AG’s Maybach, is selling more of its Phantom and Ghost sedans in China as rising incomes in the world’s fastest growing major economy boost sales of ultra-luxury cars. China has 875,000 millionaires, 6.1 percent more than last year, according to a report in April by the Shanghai-based Hurun Research Institute.

“The Chinese market in general is showing only one direction,” Harris said.“That’s exceptional growth, and it’s going to be ongoing for quite a while.”

A Rolls-Royce Phantom starts at 6.6 million yuan ($990,000) and buyers pay 4.1 million yuan for a Ghost in China where consumers pay higher taxes on imported luxury models. In the U.S., the Phantom starts at $380,000.

Munich-based BMW bought the rights to Rolls-Royce cars for 45 million pounds ($70 million) in 1998, and began building them at a new factory in 2003.

Ghost Demand

China will become Rolls-Royce’s biggest market, surpassing the U.S., as early as next year as the Ghost spurs demand for its cars, Singapore-based Harris said. The company sold about a third of its cars in the U.S. in 2009.

Rolls-Royce may add as many as four more dealers in China by the middle of next year, in second-tier cities such as Tianjin and Wuhan, he said. The Goodwood, England-based carmaker, headed by Chief Executive Officer Torsten Mueller- Oetvoes, currently has eight dealerships in the nation.

The latest Ghost model, introduced in December, has boosted growth for the exclusive marque after the financial crisis depressed sales 17 percent in 2009. Rolls-Royce delivered 2,007 cars through October worldwide, already surpassing the record since BMW took over of 1,212 in 2008, and its 1,002 deliveries last year.

The Phantom comes with a 6.75 liter engine and soft leather upholstery as standard. An extended wheelbase version of the Phantom costs 8.2 million yuan, the company said.

Chinese customers ordering a Phantom now will have to wait until late May next year to receive their cars, Harris said.

“It’s a story of success for Chinese entrepreneurial businesses, the Chinese entrepreneur works hard and wants to reward himself for a job well done,” he said.

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Lifan IPO latest in quest for capital

Lifan Industry Group Co became the first non-State-owned automaker to be listed on the A-share market when its shares began trading on the Shanghai Stock Exchange on Nov 25

The Chongqing-based maker of motorcycles and automobiles started preparations for its initial public offering (IPO) three years ago and finally won approval from the China Securities Regulatory Commission in October.

Its IPO raised 2.9 billion yuan by issuing 200 million shares at 14.5 yuan per share.

According to its prospectus, Lifan originally planned to raise 1.48 billion yuan through the IPO and use more than half of the funds raised - about 850 million yuan - to expand its passenger car facilities. Another 350 million yuan will go to its motorcycle plant, while the rest is set to boost its engine production capacity.

Lifan closed at 17.5 yuan on Nov 26, down 2 percent from the closing price on its first day of trade.

When it was established in 1992, Lifan had only nine staff members and 20,000 yuan in startup capital.

Seventeen years later, it ranked as the fifth-biggest motorcycle maker in the country with about 6 percent of the market and annual production capacity of 1 million motorcycles and 2.5 million motorcycle engines.

It was the second-biggest Chinese exporter of motorcycle in 2009 with products selling in more than 160 countries and regions.

Giving a priority to exports is one of the keys to Lifan's success, said Yin Mingshan, president of the company.

The principle also worked for Lifan's car business, which only started four years ago when its first model, the Lifan 520 sedan, hit the market.

In the first half of this year, Lifan exported nearly 7,500 sedans, ranking No 3 among domestic manufacturers.

According to Yin, the company can generate more profit from exports than from domestic sales since the price overseas is much higher.

Lifan's total car sales are currently only a fraction of its large State-owned peers and other private companies such as Geely and BYD. Last year it sold just 43,200 cars.

With the funds raised in its IPO, Lifan plans to increase its yearly capacity to 1.3 million motorcycles, 3.2 million motorcycle engines, 200,000 cars and car engines, as well as 1 million general gasoline engines, according to its prospectus.

Lifan is the second domestic automaker to be listed this year. Guangzhou Automobile Group Co went public on the Hong Kong Stock Exchange in August through a backdoor listing using its Denway Motors unit.

Leading automaker Shanghai Automotive Industry Corp was listed in Shanghai in 2006, while Dongfeng Motor Corp went public in Hong Kong in 2005.

Beijing Automotive Industry Holding Co reorganized its assets and set up a joint stock limited company at the end of September this year, a crucial move for the automaker to achieve a stock listing.

First Auto Works and Chery Automobile Co are also planning to go public.

Analysts said Chinese automakers' thirst for capital is fueled by the need to grow stronger amid unprecedented opportunity and intense competition in the world's biggest vehicle market.

Last year more than 13 million vehicles were sold in China. The figure is expected to exceed 17 million this year.

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Beijing offering subsidies of 120,000rmb to private EV buyers

The Ministry of Science and Technology recently announced its plans to offer up to 120,000rmb in subsidies to private buyers of new energy vehicles in Beijing city, which is being used as a test bed for the project before it will be rolled out nationwide.

Beijing City Govt are planning on giving subsidies of 3000rmb per kilowatt, which will give plug in electric vehicles a maximum subsidy of 60,000rmb per car, and will give hybrid vehicles a maximum of 50,000rmb per vehicle. Ultimately Beijing City will give out 1.73 billion RMB in subsidies from 2011 to the end of 2012 in the two year long test. Beijing is aiming to have 1000 new energy vehicles on the road by the end of 2010, 5000 by the end of 2011 and 24,000 by the end of 2012, which is aiming to be made up of 23,000 pure electric vehicles and 7000 plug-in hybrids.

On the infrastructure side of things, Beijing City Government is planning on giving subsidies of up to 30% for electric charging stations to be installed in the city, which will be made up of a mixture of fast and slow charging stations. Within the next three years Beijing aims to install 36000 charging stations which will give it a ratio of 1:1.2 for each car and will also install 100 fast charging stations and also battery recharging stations and also the all important service stations of which there will be ten.

Since before the 2008 Olympics Beijing has been aiming to change its infamy as being a polluted city which seems to have made some major progress in air quality in the capital.

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GM IPO now world's biggest

General Motors Co's (GM.N) initial public offering became the world's biggest at $23.1 billion after underwriters swiftly took up additional shares following last week's IPO.

The added shares vaulted GM past Agricultural Bank of China's (601288.SS) $22.1 billion IPO in July and underscored the strong demand for the taxpayer-rescued automaker's stock.

GM said on Friday that underwriters led by Morgan Stanley (MS.N), JPMorgan Chase& Co (JPM.N), Bank of America Merrill Lynch (BAC.N) and Citigroup Inc (C.N), exercised their full option on an additional 71.7 million common shares worth $2.37 billion.

They also exercised an option to purchase 13 million preferred shares for $650 million.

Underwriters had 30 days from the IPO to exercise the options.

GM last week had raised $20.1 billion in an IPO of common and preferred shares in what was the biggest U.S. IPO ever. Without the preferred shares, GM's IPO would have been smaller than China's AgBank.

On November 18, their first day of trading, the shares rose 3.6 percent. They closed on Friday up 33 cents at $33.81, or 2.5 percent above the $33 IPO price.

The U.S. government bailed out GM for $50 billion after the automaker's 2009 bankruptcy.

The IPO caps the first stage of a turnaround that has taken the 102-year-old automaker from near-death to an unlikely Wall Street flotation favorite in 2010.

A successful stock debut may help the Obama administration argue that the controversial taxpayer bailout of GM was worthwhile.

The White House has said U.S. taxpayers are on track to recoup the full investment made by the administration and that it hopes to make substantial progress toward shedding the government's stake entirely by mid-to-late 2012.

The strong response to the stock sale reflects growing investor confidence that GM is moving beyond its unpopular, taxpayer-funded bankruptcy with sharply lower costs and higher profit potential.

The U.S. Treasury remain GM's largest shareholder after the IPO with a third of the shares outstanding.

Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse and Royal Bank of Canada are GM's other major underwriters. Lazard and Boston Consulting Group served as advisers to the Treasury. Evercore Partners advised GM.

In the days before the IPO, the price range and the number of shares, including preferred, were all increased.

GM last week sold 478 million common shares at $33 each, raising $15.77 billion, as well as $4.35 billion in preferred shares, more than the initially planned $4 billion.

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Ford to add 100 new dealerships in China

Ford Motor is adding 100 new dealerships in China this year, raising its total number of outlets to 340, as it courts new car buyers in provincial cities.

Like other major auto makers, Ford is looking to emerging markets for growth lost in the United States and other traditional strongholds. It expects 70 percent of growth in its sales to come from the Asia-Pacific and African regions over the next decade.

Ford inaugurated 40 new dealerships yesterday out of 66 it will open before the end of the year. In 2010 it plans to have opened a total of 100 dealerships.

China's car market is the world's biggest and sales are growing fastest in the provincial cities as the benefits of the country's economic boom spread from its east coast to the interior where millions of new and potential car buyers live.

"When you think about China, it's the central, western and northern areas that will see the most aggressive growth," Joe Hinrichs, president of Ford, Asia Pacific and Africa, and chairman and CEO of Ford China, told The Associated Press in a phone interview.

Ford is forecasting record sales in China this year, though it got a later start and has a smaller presence here than rival General Motors Co.

The auto maker earlier reported its China sales in January-October surged 39 percent to 468,754 vehicles.

"It's been an interesting year, with a very strong first quarter and fourth quarter, though sales slowed down a bit in the summer. It's a bit of a 'U' shape," Hinrichs said.
 

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Ford Motor cuts debt by $1.9 billion

Ford Motor Co (F.N) is cutting its debt by $1.9 billion in a bid to strengthen its balance sheet and get itself rated investment grade again.

In Ford's tender offer to reduce its automotive operations debt, holders of some $2.55 billion of senior convertible notes due in 2016 and 2036 accepted cash and company stock for debt.

That reduces Ford's annual interest expense by about $180 million, the automaker said on Wednesday.

Ford borrowed heavily in late 2006, allowing it to avoid the bankruptcies that felled rivals General Motors (GM.N) and Chrysler last year, but leaving it with a heavy debt load.

The automaker expects a solid profit in 2010 and has cut its automotive operations debt by about $12.8 billion this year, reducing annual interest expense by nearly $1 billion.

Ford also expects to be net cash positive in its automotive operations -- meaning it would have more cash than debt -- by the end of 2010. It would be the first time that this would have happened since the second quarter of 2008.

Ford will pay $534 million in cash premiums and on November 30 issue 274 million shares of common stock to convert the notes. Ford has included the stock in its diluted earnings per share since the start of the year.

The automaker expects to take a $960 million charge in the fourth quarter because of the offer.

There were nearly $3.5 billion of senior convertible notes eligible for the conversion offer. Nearly all of the 2036 notes were tendered as were roughly two-thirds of the 2016 notes.

Ford shares were up 14 cents at $15.84 Wednesday on the New York Stock Exchange.

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VW October deliveries rise twice as fast as market

Volkswagen AG said sales rose more than twice as fast as the worldwide auto market last month as demand for VW and Audi models in the U.S. and China aided its bid to overtake Toyota Motor Corp. as the largest carmaker.

Deliveries by the VW group, which also includes the Skoda, Seat and Lamborghini brands, increased 9.8 percent from a year earlier to a record 612,200 cars, sport-utility vehicles and commercial vans in October, outpacing the industry’s 4.5 percent sales gain, Wolfsburg, Germany-based Volkswagen said today in a statement.

Volkswagen is targeting a second consecutive year of record deliveries as it adds about 70 models, including upgraded versions of existing vehicles. Christian Klingler, Volkswagen’s sales chief, said on Sept. 30 that VW may achieve its goal of selling 10 million vehicles a year before the target date of 2018. Volkswagen said today that 10-month deliveries climbed 12 percent to 5.98 million vehicles.

“We are continuing to gain global market share,” Klingler said in today’s statement.“We expect this trend to continue over the coming months as we systematically progress with our model initiative.”

Volkswagen’s preferred shares rose as much as 1.35 euros, or 1.2 percent, to 111.95 euros and traded at 111.90 euros as of 12:32 p.m. in Frankfurt. The stock has climbed 71 percent this year, valuing the company at 48.4 billion euros ($66 billion).

China Factories

The carmaker’s expansion targets rely on success in China, where VW is adding two factories to double production in its biggest market to 3 million cars within four years. VW plans to invest 6 billion euros ($8.2 billion) in China for the construction and to develop new models. Ten-month sales in the country rose 38 percent to 1.65 million vehicles.

Volkswagen, which will resume production in the U.S. with a factory being built in Chattanooga, Tennessee, increased 10- month sales in that market by 21 percent to 295,900.

The namesake VW brand raised deliveries by 12 percent to 3.78 million cars and SUVs in the 10 months through October. Audi sales rose 16 percent to 916,900. Skoda deliveries advanced 5.5 percent to 69,200, while Seat sales were unchanged at 285,200 vehicles. The commercial-van division’s deliveries increased 17 percent to 349,000, led by South American growth.

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Hyundai expects to add to record U.S. sales in 2011

Hyundai Motor Co (005380.KS) expects to set a company record for annual U.S. sales next week and to increase from there in 2011 amid gradual industry growth, its top U.S. executive said on Friday.

Hyundai Motor America President and CEO John Krafcik said he expects U.S. auto industry sales to rise to 12.3 million vehicles in 2011, from about 11.3 million this year, almost purely from sales to retail customers.

"As we look at how heavy the industry went to the fleet market to keep sales up this year, it is pretty amazing," Krafcik told reporters at a Hyundai facility near Ypsilanti, Michigan."We are not going to have that next year."

Krafcik said the increase in 2011 would amount to a 10 percent rise in retail sales for the industry. That mark will be hard to reach, with retail sales closely tied to housing starts and home equity in the United States, which remain uncertain amid high unemployment, he said.

"That is asking a lot," Krafcik said.

Hyundai, which has been introducing new versions of its vehicles, including a Sonata sedan, expects to top 500,000 in U.S. sales by mid-December and end 2010 with a 4.8 percent market share.

Krafcik said the 2011 sales goal would be"more than that." He also said it would be hard to increase U.S. market share much in 2011 due to company production capacity limits.

Hyundai has been hitting maximum production capacity in the United States, with sales up 21 percent through the first 10 months of 2010, and will have similar limits next year, Krafcik said.

The automaker added about 100,000 vehicles of U.S. capacity this year, reaching about 400,000 vehicles by shifting production of Santa Fe SUVs to a Kia plant.

"I think it is fair to say we will probably be production constrained next year as well," Krafcik said.

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