Hyundai Wia Reports 2Q Operating Loss of 38.5 Billion KRW, Turns to Deficit... "Impact of Decreased Finished Vehicle Exports"

[Asia Economy Reporter Su-yeon Woo] Due to the sharp decline in finished car exports overseas caused by the novel coronavirus infection (COVID-19), a red light has turned on for the performance of parts manufacturer Hyundai Wia.

On the 24th, Hyundai Wia announced that its operating loss in the second quarter was 38.5 billion KRW, turning to a deficit compared to the previous year. During the same period, sales amounted to 1.2136 trillion KRW, down 36% year-on-year, and net loss also turned to a deficit at 48.4 billion KRW.

This poor performance is due to the intensification of the COVID-19 pandemic from the second quarter, which caused a sharp decrease in finished car exports overseas. As finished car exports declined, parts sales of Hyundai Wia, a parts manufacturer, inevitably decreased significantly. In particular, the profitability of overseas subsidiaries in Mexico, China, and other countries deteriorated greatly. The machinery division also faced difficulties due to a decline in manufacturing industry facility investments, and both general-purpose machine tools and factory automation (FA) volumes decreased.

However, although difficulties were experienced until the second quarter, from the second half of the year, the finished car sales networks in overseas markets are gradually normalizing, and Hyundai Wia's parts supply chain is expected to stabilize. A Hyundai Wia official said, "Overseas sales of finished cars are gradually increasing, and investments in the machinery division are also slowly recovering," adding, "We will seek to improve profitability by shifting to a high-performance model-centered system focused on the X series."

Hyundai Wia is also faithfully implementing an eco-friendly parts roadmap in preparation for the era of eco-friendly vehicles. Hyundai Wia plans to complete the development of eco-friendly parts such as thermal management systems for eco-friendly vehicles and air compressors for hydrogen fuel cell vehicles by 2023. The next-generation driving part, IDA, will be mounted on Hyundai Motor Company's electric vehicle-exclusive platform (e-GMP), and is expected to have a positive impact on profitability improvement from next year onward.

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