Hyundai Kia Motors Q1 Sales Down 9.1%... Lowest in 9 Years
[Asia Economy Reporter Kiho Sung] Hyundai Kia Motors' global sales volume in the first quarter of this year recorded 1.55 million units, down 9.1% from the first quarter of last year. It is the first time in over nine years since the second quarter of 2011 that Hyundai Kia's quarterly sales volume has fallen below 1.5 million units. However, Hyundai Kia's first-quarter revenue and operating profit performed better than market expectations due to the exchange rate effect.
Kia Motors announced on the 24th that it recorded sales of 14.5669 trillion KRW, operating profit of 444.5 billion KRW, and net profit of 266 billion KRW in the first quarter. Sales increased by 17.1% compared to a year ago, but operating profit and net profit decreased by 25.2% and 59%, respectively. The number of finished vehicle sales (wholesale) was 648,685 units, down 1.9%. This exceeded the securities market's forecast of average first-quarter sales of 13.917 trillion KRW and operating profit of 348.9 billion KRW.
However, the market is showing a reaction that it is difficult to evaluate this as an 'earnings surprise.' This is because the exchange rate effect prevented a deterioration in performance. The won-dollar exchange rate showed a relatively weak won, falling from an average of 1,125 KRW in the first quarter of last year to 1,193 KRW this year. This was a major reason why sales increased despite the decrease in sales volume.
Hyundai Motor Company, which announced its results the day before, also exceeded market expectations with sales of 25.3194 trillion KRW and operating profit of 863.8 billion KRW, reflecting the exchange rate effect and one-time operating income. However, global finished vehicle sales volume was 903,371 units, down 11.6% from a year ago. This was due to the contraction of the global sales market caused by the COVID-19 pandemic. Accordingly, the combined global sales volume of Hyundai Kia Motors in the first quarter of this year was 1,552,056 units. This is the lowest since 1,039,082 units in the second quarter of 2011.
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The real crisis will begin from the second quarter, when the full impact of COVID-19 is felt. This is because COVID-19 is spreading worldwide, including North America, Europe, and Latin America. Accordingly, there are concerns that Hyundai Kia Motors' global sales volume in the second quarter may fall below 1.5 million units.
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