SEOUL, Jan 30 (Reuters) - Hyundai Motor Co, South Korea's largest automaker, said on Thursday it plans to offer greater incentives to customers in the key U.S. market, hoping to keep market share during a fierce price war.
Hyundai is betting on exports to drive up profits in 2003 as domestic sales are not expected to be as strong as last year, after the South Korean government terminated tax incentives on automobile purchases in September.
But the climate for sales in the U.S. market has become tougher for Hyundai and affiliate Kia Motors Corp , as General Motors Corp , the world's largest automaker, fueled a relentless price war by offering aggressive discounts to try to boost its U.S. market share.
A Hyundai Motor official told Reuters the auto maker planned to slash interest rates on installment financing in the United States to around 1.5 to 2.5 percent from the current four to 4.5 percent.
The official said the slashed interest rates would take effect "soon", but could not give an exact date.
The interest rate would be similar to those offered by Japanese rivals, he said.
A Kia official said it would make a similar move.
A spokeswoman for Kia told Reuters the automaker had begun offering installment financing to a greater number of customers in the United States since early this year, but was not able to comment on the exact change in interest rate.
The Hyundai official said dealers who sold more than 15 automobiles a month would be eligible for discounts of $300 per vehicle from the current $100.
At the end of last year, Hyundai ranked seventh in U.S. automobile sales, accounting for a 2.2 percent market share, just behind Nissan Motor Co , but higher than Mitsubishi Motors Corp and Mazda Motor Corp .
Kia held a 1.4 percent market share.
(With additional reporting by Lee Shin-hyung)