'Corona Escape' Hyundai Motor, Q3 Operating Profit Expected to Reach 1 Trillion Won

Hyundai Motor 3Q Operating Profit Consensus 1.0891 Trillion KRW
Expected 187% Increase YoY
Kia Motors 3Q Operating Profit Consensus Up 81%
Recovery in Overseas Sales and Factory Operations Post-COVID Impact

[Asia Economy Reporter Su-yeon Woo] Hyundai Motor Company's operating profit for the third quarter of this year is expected to recover to the 1 trillion won level as it escapes the impact of the COVID-19 pandemic. This is thanks to a robust domestic market, a clear recovery in advanced markets such as the U.S. and Europe, and the normalization of operations at all global factories.

According to FnGuide on the 12th, the consensus forecast for Hyundai Motor's operating profit in the third quarter of this year is 1.0891 trillion won, representing a 187% increase compared to the same period last year. Hyundai's quarterly operating profit surpassed 1 trillion won in the fourth quarter of last year but fell to the 500 billion won level in the second quarter of this year due to the impact of the COVID-19 pandemic.

Unless there are external variables such as large-scale provisions, sudden exchange rate fluctuations, or a resurgence of COVID-19, the operating profit for the third quarter of this year is expected to comfortably recover to the 1 trillion won level. However, the recently decided global recall provision for the Kona electric vehicle could be a partial variable, but it is estimated to be limited to several tens of billions of won.

Recently, Hyundai Motor has been recognized for its product competitiveness in the global market through a mix improvement focused on the luxury brand Genesis and sport utility vehicles (SUVs). Additionally, the absence of the annual summer strike is expected to act as a positive factor for performance.

Hyundai's overseas sales, which fell to around 470,000 units in the second quarter, successfully turned around to nearly 800,000 units in the third quarter. Although sales volume has not yet recovered to the usual level (900,000 units per quarter), revenue is expected to decline compared to the previous year, but profitability is likely to increase due to the portfolio restructuring centered on Genesis and SUVs.

It is also encouraging that the average selling price (ASP) in overseas markets continues to rise steadily while dealer incentives are decreasing. Last month in the U.S. market, Hyundai's ASP was $28,742 per vehicle, up 12% year-on-year, while incentive prices dropped 14% to $2,361 per vehicle.

Meanwhile, Kia Motors is also expected to recover its operating profit to the 500 billion won level in the third quarter, returning to pre-COVID-19 levels. The consensus for Kia's third-quarter operating profit is 529.9 billion won, an 81% increase year-on-year, while sales consensus is projected to decrease by 3.5% to 14.5612 trillion won. Kia's strong sales centered on the large SUV Telluride in the U.S. and the expansion of electric vehicle market share in Europe, along with the recovery of overseas exports since August, have contributed to this.

Experts anticipate that Hyundai Kia Motors' performance improvement will become more apparent in the fourth quarter of this year and next year. From next year, new electric vehicles based on dedicated electric platforms will be launched, and the full-scale export of hydrogen fuel cell trucks overseas will begin, marking the start of a structural performance improvement cycle.

Ja-il Lee, a researcher at Eugene Investment & Securities, said, "Hyundai is undergoing a major portfolio transformation with plans to launch not only large SUVs and Genesis models but also dedicated platform electric vehicles, hydrogen trucks, and pickup trucks targeting the U.S. market," adding, "The recently launched models are also receiving strong new car effects based on their product competitiveness, which is positive."

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