Hyundai Motor chairman Chung Mong-koo kept his face down on Monday as prosecutors in Seoul accused him of embezzlement. Next year, South Korea's richest man will learn if he is going to prison. Chung's arrest is at the centre of a miserable year for Hyundai and its affiliate Kia Motors Corp, the country's largest carmakers. Building of factories in Europe and the United States has been delayed, the development of new models has slowed, strikes have cost more than US$2 billion in lost production and the stronger won has undermined the companies' price advantage over rivals such as Toyota Motor Corp. Hyundai Motor's stock has slumped 30 per cent this year, wiping out 6.3 trillion won (HK$52.78 billion) in shareholder value while Kia's shares fell almost 50 per cent. It is a long way from last year when sales and shares were soaring and Chung was promising to turn Hyundai Motor Group into the world's fifth-largest carmaker by 2010. The outlook remains bleak. 'Buying the stock right now is out of the question,' said Lee Geun-youn, a fund manager at Tong Yang Investment Trust Management. 'No big new model is coming so there's nothing to boost sales and share prices. There's no good news on the horizon.' Hyundai Motor's third-quarter profit tumbled 47 per cent from a year earlier to 282.8 billion won, the largest drop in net income since 2001. Kia posted a loss of 43.9 billion won in the three months to September, its first loss since 1998. The won's appreciation hurts the carmakers' profit by reducing the repatriated value of their overseas sales. Every 1 per cent gain in the won reduces this year's earnings for Hyundai Motor 2 per cent and 4.7 per cent for Kia, according to an estimate by Merrill Lynch. 'The biggest hurdle for us now is the currency,' said Ahn Yong-mo, an executive vice-president of Hyundai's overseas marketing unit. Exports make up the bulk of sales for both companies, accounting for 57 per cent of revenue in the first nine months of the year for Hyundai Motor and 73 per cent for Kia. The won has gained almost 9 per cent against the US dollar this year, becoming the second-best performer among 15 Asia-Pacific currencies. The yen has fallen 0.5 per cent against the US dollar over the same period. The won's gain forced Hyundai Motor to raise the price of its revamped Accent subcompact twice since September last year, making it more expensive than Toyota's Yaris subcompact in the US. Hyundai Motor is lagging its sales goal for the year, prompting Chung to ask his staff this month to find ways of countering the impact of the rising won. Sales of Sonata midsize cars in the US were 7,438 in October, the lowest since January last year, as Toyota's new Camry has taken customers from Hyundai Motor. Hyundai's US market share slid to 2.4 per cent last month, after peaking at 3.2 per cent in July. 'I'm really concerned about the fall in Hyundai's market share in the US. It seems like it's not a temporary issue,' said Lee Keon-hak, a manager at CJ Asset Management. Chung, whose equity holdings of US$2.2 billion make him the country's wealthiest man, was arrested in April and spent two months in jail before being released after posting bail of one billion won. His trial pushed back the opening of Kia's US$1.2 billion factory in the US state of Georgia and Hyundai's US$1 billion plant in the Czech Republic. 'Most investors don't expect Chung to go back to jail,' said Shin Gun-shik, a manager at IBK-SG Asset Management. 'The factor is already priced in.' Hyundai is also falling behind rivals in emerging markets such as China. The company's market share in China, the fastest-growing car market, fell to 6.5 per cent last month compared with 7.5 per cent for last year. Chung would spend less time on managing day-to-day operations and focus on long-term projects such as big overseas investments, the company said. Even if Chung is acquitted, his influence over the company might lessen after the trial highlighted the company's dependence on him to make decisions, said Yang Si-hyong, an analyst at Daishin Securities.