[Click eStock] Automobiles, Global Sales Just Beginning... Increasing Market Share

[Asia Economy Reporter Lee Seon-ae] Korea Investment & Securities presented an overweight investment opinion on the automobile sector on the 7th. Although January sales were somewhat disappointing, sales recovery is expected from February.

Hyundai Motor and Kia's January sales were sluggish due to the continued impact of semiconductor shortages amid a high base effect. Global sales volume in January were 282,000 units for Hyundai Motor and 213,000 units for Kia, down 12.1% and 5.7% respectively (all YoY, based on wholesale sales). Compared to the previous month, Hyundai Motor sales decreased by 15.5%, while Kia sales increased by 2.2%. This was because Kia's sales were relatively weak in the previous month due to the impact of the Christmas holiday.

Domestic sales recorded -22.3% for Hyundai Motor and -10.7% for Kia. Hyundai Motor was significantly affected by production suspension in January due to the conversion work of the Asan plant to electric vehicles. The Asan plant produces 300,000 units annually, including Grandeur and Sonata models. This accounts for about 8% of sales volume.

Overseas sales recorded -9.8% for Hyundai Motor and -4.6% for Kia. While weakness in China continued, Kia's sales increase in India and Mexico is estimated to have been reflected.

Although the importance of sales volume is not as significant as before, January sales were somewhat disappointing. The sales guidance presented at the beginning of the year for Hyundai Motor and Kia are 4.32 million units (+11.1%) and 3.15 million units (+13.5%) respectively. January sales amount to only 6.5% and 6.8% respectively by simple calculation. In February, the Hyundai Motor Asan plant is expected to operate normally, and sales recovery is anticipated due to an increase in business days caused by the Lunar New Year holiday. From the second quarter, semiconductor supply is expected to ease, accelerating sales recovery.

Kim Jin-woo, a researcher at Korea Investment & Securities, explained, "Since Hyundai-Kia minimized production disruptions by utilizing semiconductor inventory until April last year, it is necessary to consider the high base until April this year," adding, "In the mid to long term, the conversion to electric vehicle plants is more important for corporate value than immediate sales performance."

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