UPDATE 1-Hyundai, Kia post strong sales, may see market share gain

* Hyundai sales up 1.7 pct in March; Kia sales up 30 pct

* Hyundai, Kia little affected by Japan quake

* Hyundai, Kia shares down after recent gains

(Adds details, comments)

SEOUL, April 1 (Reuters) – South Korea’s Hyundai Motor
and its affiliate Kia Motors reported
solid car sales for March on Friday, driven by new models, and
as it largely escaped the supply disruptions from Japan that
affected many global carmakers.

Analysts say Hyundai and Kia are better placed to weather
Japan woes than their overseas peers because of the Korean firms
rely less on Japanese components, although uncertainty remains
over longer-term effects.

“We believe the Japanese car makers will see their sales
volume decline significantly, at least in Q2, providing
opportunities for Korean companies to gain market share,” Simon
Park, analyst at RBS, said in a report.

Toyota Motor Corp’s U.S. sales arm said on Thursday
it would raise retail prices for its models sold in the U.S.
market to counter Japanese yen gains on the U.S. dollar, which
may increase cost competitiveness of Korean cars.

In Japan, automobile sales, excluding mini-vehicles, tumbled
37 percent in March from a year earlier, led by a 46 percent
drop at Toyota, as the market feels the effects of the deadly
March 11 earthquake and tsunami. [ID:nL3E7F10OH]

Kia’s CEO said on Thursday that South Korea’s second-largest
automaker does not expect any major impact from the quake,
although a prolonged disruption could affect supplies of paint.

The South Korean units of General Motors and Renault
have cut production at their Korean plants in the wake of
Japan’s March 11 earthquake and tsunami.

Hyundai saw its March sales inch up 1.7 percent to
a record, helped by strong sales of the Sonata sedan and
revamped Grandeur large-sized sedan, while Kia said its global
sales surged 30 percent to a fresh record in March, thanks to
solid sales of the Picanto subcompact, the Optima sedan and the
Sportage R SUV.

Hyundai shares fell 0.3 percent in a broader market
that was up 0.4 percent as of 0550 GMT. Kia shares dropped 0.9
percent. Shares in the two automakers outperformed the broader
market after Japan’s earthquake.

Hyundai’s strong sales came despite an ongoing labour
dispute that has disrupted production at one of its plants in
South Korea. Hyundai has not been able to produce the new
utility coupe Veloster and some of its Accent subcompact because
of the protest by labour members over the automaker’s plan to
reallocate workers at the factory.

The utilization rate is only 33 percent at Hyundai’s first
factory in the southeastern city of Ulsan, the company
spokesperson said on Friday.

(Reporting by Hyunjoo Jin; Additional reporting by Yerim Kim;
Editing by Ken Wills)

UPDATE 1-Hyundai, Kia post strong sales, may see market share gain