Hyundai Kia Motors, August US Sales Growth 'Temporarily Paused'

Hyundai Motor "Impact of Shortened Operating Days in August"
Hyundai Motor and Kia Motors Down 8% and 6% Respectively
SUV Popularity Including Telluride Continues

Domestic Market Also Affected by Reduced Excise Tax Cuts
Consistent 'Downward Trend' in the Second Half

Kia Telluride (Photo by Kia)

[Asia Economy Reporter Kim Ji-hee] Hyundai Kia Motors' sales recovery in the second half of the year is struggling to gain momentum. While strong domestic sales that compensated for overseas sluggishness in the first half of this year faltered starting in July, the rapidly rebounding U.S. sales also slowed down somewhat, deepening Hyundai Motor Group's concerns.

According to Hyundai Motor Group on the 2nd, Hyundai Motor sold 59,721 units (including Genesis) in the U.S. in August. This halted the momentum just one month after sales turned to an increase compared to the same period last year for the first time since the COVID-19 pandemic in July. However, compared to the previous month, sales increased by 1.3%, indicating a slow but ongoing recovery amid COVID-19. Hyundai Motor's U.S. subsidiary explained, "The number of business days was about three days fewer than in August last year, which had an impact."

Kia Motors is in a similar situation. Last month's U.S. sales were 57,015 units, up 9% from the previous month, but still about 6% lower than the same period last year.

At least the fact that major Japanese competitors are struggling in the U.S. market is a point where Hyundai Kia can expect some indirect benefits. Toyota, Honda, and Subaru's August sales decreased by double digits compared to the same period last year, by 22.7%, 21.9%, and 17.4% respectively, falling into a deep slump. The only brand that rebounded in the U.S. market last month was Volvo (12.9%). Even based on cumulative sales from January to August this year, Japanese car brands dropped by 20%, while Hyundai Kia fell by 13%, showing a relatively better performance.

Hyundai Kia plans to maximize the operating rate of its U.S. plants and launch an all-out sales response in the second half. Recently, Hyundai Motor has been operating its Alabama plant at full capacity (100% operating rate), and Kia Motors has started increasing production of the popular Telluride model at its Georgia plant since July. The Telluride, which reportedly has tens of thousands of local waiting demand, saw sales increase from the mid-2,000 units level in May and June to 4,822 units in July and 7,588 units in August. For Hyundai Motor, the popularity of SUVs such as Tucson (11,632 units), Santa Fe (9,129 units), and Palisade (7,983 units) remains strong, which is positive.

Cho Soo-hong, a researcher at NH Investment & Securities, analyzed, "Hyundai Kia's U.S. sales in August continued to be favorable, supported by the new car effects of Telluride, Palisade, and Seltos," adding, "In the U.S., new model launches such as GV80, G80, and Sorento are worth looking forward to."

Meanwhile, the domestic market, which was considered a COVID-19 safe zone until the first half of the year, has shown a clear downward trend in the second half. Hyundai Kia's domestic sales, which surged to around 140,000 units in June, began to show signs of a full collapse in July due to the reduction of individual consumption tax benefits. Last month, Kia Motors' domestic sales plummeted 11.3% year-on-year to 38,463 units, compounded by supply reductions due to partial line reorganization at the Hwaseong plant. Hyundai Motor recorded 54,590 units, up 3.2%, but considering that monthly sales have not fallen below 70,000 units since March, this is considered below expectations.

Within the industry, there have even been calls to abolish the individual consumption tax on cars altogether to stimulate automobile consumption. This is because the recovery in major overseas markets remains minimal, and even the domestic individual consumption tax and new car effects have weakened. Moreover, with the resurgence of COVID-19 not subsiding domestically and internationally, there are even bleak forecasts that a more severe performance slump than in the first half of this year could become a reality.

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