[Click eStock] Hyundai·Kia April Sales Plunge..."Overseas Sector Hit Hard by COVID-19"

April Overseas Sales Hyundai 70%, Kia 55% Sharp Decline
Second Half Sales Recovery Expected... "Stock Prices to Experience Increased Volatility for Now"

[Asia Economy Reporter Minji Lee] Hyundai and Kia Motors' sales in April significantly declined as the impact of the novel coronavirus disease (COVID-19) began to be fully reflected. Domestic sales focused only on new models, while overseas sales decreased in most markets.

[Image source=Yonhap News]

According to a report released on the 6th by Korea Investment & Securities, global sales in April were 159,079 units for Hyundai and 134,216 units for Kia, down 57% and 41% respectively compared to the same month last year. In March, the figures were approximately -20% and -6% year-on-year.

Looking at domestic sales, Hyundai's sales decreased by 0.5%, while Kia's increased by 19.9%. Hyundai managed to hold up as sales of the Grandeur (48%), Avante (43%), and G80 (129%) increased compared to last year, but SUV sales fell by 19% due to model aging. Kia's overall sales were driven by the new model effect of the K5 (114%), K7 (81%), Sorento (108%), and Mohave (114%).

Overseas sales dropped by 70.4% for Hyundai and 54.9% for Kia. This was due to the full-scale impact of COVID-19 in major regions such as Europe, the United States, and India. Jinwoo Kim, a researcher at Korea Investment & Securities, diagnosed, “By region, the U.S. performed better than expected, while Europe and India performed worse than expected, but overall the market is experiencing a sharp decline in sales volume.”

The key issue for the automotive industry going forward is profitability. Signs of deterioration are appearing in the auto finance sector, competition is intensifying, and parts suppliers are facing increased cost burdens. Even if sales gradually rebound from the second half of the year, sales competition including incentives is expected to be fierce as all companies' sales surge simultaneously.

Post-COVID-19, restructuring among global companies is also anticipated. However, due to the nature of the automotive industry receiving government support, restructuring is expected to proceed slowly, increasing competitive intensity. Researcher Kim said, “Hyundai and Kia’s recovery will be relatively faster among global companies, supported by financial soundness and new model cycles,” adding, “Stock prices will go through a period of increased volatility until recovery becomes visible.”

This content was produced with the assistance of AI translation services.