Hyundai Motor KS, South Korea's top auto maker, plans to boost struggling China and U.S. sales with another factory and new models but investors reacted with skepticism, sending its shares down almost 5 percent.

Hyundai, the world's No.6 auto maker along with its affiliate Kia Motors Corp, aims to almost double sales in China with output from another factory there and to raise U.S. sales by 10 percent by introducing new models, a company official said on Thursday.

But analysts said Hyundai's targets were too optimistic.

The company's will is positive. But the company cannot meet the targets only with will and there is no answer when we ask how, said Kim Jae-woo, an analyst at Mirae Asset Securities.

In China, it is difficult to lift sales even if the company launches many big hit models due to cut-throat competition. In the U.S., overall demand is unlikely to revive soon due to the housing sector.

A firmer won currency is another concern, they added.

Shares in Hyundai closed down 4.9 percent at 67,500 won, underperforming a 0.1 percent fall in the broader market

Investors remained worried about the U.S. and China. Hyundai's valuation has been hampered as investors lost confidence because the outlook for the company's future growth overseas is unclear, said Cho Soo-hong, an auto analyst at Hyundai Securities.

Reflecting the concerns, Hyundai's October sales from overseas units fell 2.7 percent from a year ago, while exports from local factories jumped 37.5 percent. Overall October sales grew 15.3 percent from a year ago.

Overseas units are key for Hyundai's growth as they help the company reduce impact from a stronger won and possible disputes with its union. The won is near its strongest versus the dollar in almost a decade.

Hyundai, which has factories in the United States, China, India and Turkey, is adding a plant in the Czech Republic.

TOO AMBITIOUS

Hyundai aims to sell 500,000 units in China next year after it opens a second plant in the world's fastest growing auto market, the Hyundai official told Reuters, asking not to be identified.

China's booming economy has drawn the world's top car makers, including General Motors Corp, Toyota Motor Corp and Honda Motor Co, all keen to sell cars to an increasingly wealthy population.

Fierce competition forced Hyundai, which saw a 21 percent drop in Chinese sales during the first nine months of 2007 from a year ago, to cut its sales target for 2007 in September for the country by 16 percent to 260,000 units from the previous 310,000.

Its capacity in China will double to 600,000 units per year with the new $1 billion plant on the outskirts of Beijing. Mass production at the plant is due from May, 2008.

Hyundai expects its new models such as the premium BH sedan, which will have a V-8 engine, to help increase U.S. sales next year, the official said.

Global auto makers have taken a hit in the world's largest auto market due to a slowdown in the U.S. economy, and analysts say Hyundai is not an exception. Last week, a Hyundai senior official admitted the company would miss its revised sales target in the world's top economy, saying it would sell 475,000 units there.

The auto maker decided to halt production at its U.S. plant for 10 days in the fourth quarter after lowering its sales target in the country from an initial 555,000.

The weaker performance came as the won hovered around levels which last seen during the Asia financial crisis 10 years ago.

Hyundai is setting up business plans for the next year with a foreign exchange rate of 880 won per dollar, the official said, versus current levels around 900 won per dollar.

A stronger won punched down other auto stocks although combined October sales at South Korea's five automakers rose 22.3 percent from a year ago.

China South Korea India