Automobile Stocks That Hesitated... When Will They Start Running?

Europe Shows Steady Growth in Market Share
Key Is Presenting a New Mobility Vision Beyond Simple Sales Increase

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Domestic leading automobile stocks such as Hyundai Motor and Kia are struggling to recover their stock prices since the beginning of the year when rumors of collaboration with Apple on autonomous electric vehicles surfaced. Although their market share is steadily increasing, analysts say that resolving the vehicle semiconductor supply shortage and announcing additional future mobility strategies will be key to a rebound.

According to the Korea Exchange on the 19th, Hyundai Motor's stock price fell 1.44% based on the closing price up to the previous day this month. Kia's stock price dropped 2.35% during the same period. Compared to the KOSPI's 0.78% decline over the same period, this represents a drop two to three times greater. Since reaching an all-time intraday high of 289,000 KRW on January 11, Hyundai Motor's closing price has not surpassed the 250,000 KRW mark even once since February. Kia also has struggled to stabilize above the 90,000 KRW level after breaking through 100,000 KRW in early February, setting a 52-week high.

Despite production disruptions caused by the vehicle semiconductor shortage, demand remains solid. Expectations for recovery led by Europe and the United States persist. In fact, last month, Hyundai Motor and Kia's finished vehicle sales in Europe increased by 11% and 3% year-on-year, respectively. Market share also rose, with Hyundai Motor gaining 2.0 percentage points to 5.5%, and Kia increasing by 1.7 percentage points to 5.4%. This contrasts with European automobile sales this month, which totaled approximately 799,000 units, down about 29% year-on-year?the largest drop since May 2020, when COVID-19 peaked.

However, for a more sustained stock price rebound, analysts say fundamental transformative drivers must be presented. Junseong Kim, a researcher at Meritz Securities, explained, "The automobile industry is no longer just about simple sales but about presenting a vision that can target the new mobility market centered on autonomous driving and electric vehicles. For Hyundai Motor, the mobility growth strategy to be announced early next year and Kia's progress in forming an automotive manufacturing alliance with major overseas technology companies will be crucial."

In fact, the recent 2% rebound in Hyundai Motor and Kia's stock prices is interpreted as a result of renewed attention to past collaboration rumors following Apple's announcement of plans to launch the Apple Car by 2025. Additionally, Hyundai Motor's announcement the day before of a 500 billion KRW share buyback to enhance shareholder value was also a positive factor. This is the largest buyback in 15 years since the 651.1 billion KRW buyback in February 2005.

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