Hyundai Kia Motors Performs Well in US Market, Opportunity to Expand Market Share Amid COVID-19

2Q US Sales Hyundai Motor Down 24%, Kia Down 25%
Outperforming Competitors Including Japanese Brands During Same Period
Hyundai Kia Highlight Strong Liquidity and Domestic Sales
Increased External Credibility Amid COVID-19 Pandemic

[Asia Economy Reporter Su-yeon Woo] Hyundai Kia Motors is holding its ground in the U.S. market, where sales have contracted due to the novel coronavirus disease (COVID-19), outperforming its competitors. With abundant liquidity, expanding market share in the U.S., and a solid domestic market, there are prospects that Hyundai Kia Motors could secure a leading position in the global market if it successfully overcomes the current COVID-19 crisis.

According to industry sources on the 2nd, Hyundai Motor's U.S. subsidiary sales in the second quarter of this year were 141,722 units, down 24% compared to the same period last year. During the same period, Kia Motors sold 125,392 units, a 25% decrease. The demand in the U.S. market itself declined significantly as the impact of COVID-19 intensified in the second quarter. However, compared to competitors such as Nissan (-49%), Fiat Chrysler (-39%), Toyota (-35%), and GM (-34%), Hyundai Kia Motors' sales decline was relatively limited.

Looking at June alone, Hyundai Motor sold 50,135 units, down 22% year-on-year, while Kia Motors recorded 47,870 units, a decrease of only 15%. June's performance also successfully defended against competitors such as Nissan (-46%), BMW (-39%), Audi (-30%), and GM (-30%). Popular sport utility vehicles (SUVs) like Hyundai's Palisade and Kia's Sportage and Seltos accounted for more than half of the sales, leading the market.

Randy Parker, Vice President of Sales at Hyundai Motor's U.S. subsidiary, said, "Palisade set a new record, and retail SUV sales increased by 34% in June," adding, "Thanks to the prompt actions of local dealers to meet the growing customer demand, retail sales have increased for two consecutive months."

(Data compiled by each company)

Meanwhile, Hyundai Kia Motors continues to run steadily in the domestic market despite the impact of COVID-19. In June this year, Hyundai Motor's domestic sales increased by 37% year-on-year to 83,700 units, and Kia Motors rose by 41% to 60,500 units. By model, the best-selling Grandeur (15,688 units), the recently launched Kia Sorento (11,596 units), and Avante (10,875 units) drove growth.

Adding to this is robust liquidity, which has also improved external credibility. Recently, global credit rating agency Moody's downgraded the credit ratings of 9 out of 22 major automakers, but Hyundai Kia Motors' credit rating (Baa1/negative) remained unchanged. Moody's lowered the credit ratings of the three Japanese automakers?Toyota, Honda, and Nissan?by one to two notches due to COVID-19. As a result, Hyundai Kia Motors' credit rating is now higher than Nissan's and narrowed the gap with Honda to one notch.

Moody's forecasts that global automobile market sales will decline by more than 20% year-on-year in 2020. Even if demand recovers sharply from 2021, it is expected to take several years to return to last year's levels. Despite the negative market outlook, Moody's expects companies with strong liquidity, excellent positioning in target markets, geographic diversity, and portfolios focused on premium brands to recover quickly after the recession.

Additionally, in Moody's liquidity assessment of global automakers, Hyundai Kia Motors ranked among the top 22 companies. Moody's investigated the liquidity ratio (cash + marketable securities, etc.) of automakers compared to just before the 2008 financial crisis. According to the survey, Hyundai Motor currently holds 335% (16 billion USD) of the liquidity compared to 2008, and Kia Motors holds 900% (7 billion USD), while the industry average was 83%.

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