Have We Passed the Bottom... Hyundai Motor and Kia with Foreign Investors Returning

Recent Steady Inflow of Foreign Buying
Rising Expectations for Future Cars like Hydrogen Vehicles

Electric vehicle GV60 from Hyundai Genesis brand (Provided by Hyundai Motor Company)

[Asia Economy Reporter Minwoo Lee] The stock prices of automobile companies such as Hyundai Motor and Kia, which had been sluggish for a while, are stirring again. Although last month's sales volume was somewhat flat, it is interpreted that buying demand surged, judging this as a bottom. Additionally, future car expectations seem to be rising again through the upcoming hydrogen strategy announcement scheduled for the 7th.

According to the Korea Exchange on the 2nd, foreign investors have consecutively net purchased Kia for 9 trading days from the 20th of last month until the previous day. This is the longest record since 11 consecutive trading days of net purchases in September last year. During this period, they bought a total of 155 billion KRW worth of shares. This amount ranks 7th in net foreign purchases during the period. Stock prices also rose together. From the 23rd until the previous day, the stock closed higher for 8 consecutive trading days, rising by about 8.06%. This is about 70% higher than the KOSPI's 4.79% increase during the same period. Hyundai Motor showed a similar trend, closing higher on all days except for 2 trading days since the 20th of last month.

Although recent sales volume was somewhat sluggish, expectations for future car strategies appear to have stimulated investor sentiment. Last month, Hyundai Motor and Kia recorded global sales of 294,591 units and 217,204 units, respectively. Compared to the same month last year, Hyundai Motor decreased by 7.6%, while Kia increased by 0.1%. Due to variables caused by the COVID-19 Delta variant, the normalization of production and sales in the second half of the year seems to have been somewhat delayed. The issue of semiconductor supply disruptions for vehicles, reemerging due to regional lockdowns in Southeast Asia, also had an impact.

Nevertheless, from the demand side, a favorable environment still appears. It is analyzed that a virtuous cycle of external growth and profitability improvement can be expected due to the successful new car effect. Soohong Cho, a researcher at NH Investment & Securities, explained, "The recent decrease in automobile sales is due to supply-side factors, so it is not a structural issue," adding, "Considering that the automobile demand base is solid due to overseas deferred demand, it is necessary to look toward the post-normalization of production."

Expectations for future car strategies are also growing. Hyundai Motor announced on this day its plan to sell only hydrogen electric vehicles and battery electric vehicles from 2030 in its luxury car brand Genesis, aiming to achieve carbon neutrality by 2035. On the 7th, it plans to hold the ‘Hydrogen Wave’ event and present a group-level hydrogen society strategy.

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