Hyundai Motor and Kia, Disappointing Q1... Growing Optimism for the Second Half

[Asia Economy Reporter Yoo Hyun-seok] Hyundai Motor Company and Kia saw a slight decrease in sales in the first quarter due to semiconductor shortages and the Ukraine crisis, leading to forecasts that this year's target of 7.47 million units may be difficult to achieve. However, with remarkable performance in Genesis and eco-friendly vehicles, as well as expanding market shares in various regions, it is analyzed that sales will quickly recover once external conditions improve.

According to the completed car industry on the 16th, Hyundai Motor and Kia sold 901,913 units and 689,990 units respectively in the first quarter of this year. Compared to the same period last year, Hyundai Motor's sales decreased by 9.8%, and Kia's by 0.7%. Combined, this represents a 6.1% decrease.

The sales targets set by Hyundai Motor and Kia at the beginning of the year were 4,323,000 units and 3,150,000 units respectively, totaling 7,473,000 units. If the first quarter's estimated trend continues, it is predicted that the overall annual target may not be met.

To meet this year's targets, Hyundai Motor and Kia need to sell 1.14 million units and 820,000 units per quarter respectively. The problem is that supply instability caused by semiconductor supply issues and the Ukraine crisis continues. Market forecasts also express concerns about these external variables. Hana Financial Investment estimates that Hyundai Motor and Kia will record sales of 4.07 million units and 3.05 million units respectively this year.

However, since the sales decline so far has been due to external environmental factors, the prevailing view is that recovery will begin after the first quarter low point. Unlike global automakers that saw double-digit sales declines in major markets in the first quarter, Hyundai Motor and Kia recorded only slight decreases, maintaining relatively strong sales.

According to foreign media, Hyundai Motor and Kia (including Genesis) sold 322,593 units in the U.S. in the first quarter, a 3.7% decrease compared to the same period last year. However, this is a strong performance compared to Toyota (-14.7%), GM (-20.4%), Stellantis (-13.6%), and Honda (-23.2%), all of which experienced double-digit declines. Hyundai and Kia also maintained their 5th place market share.

Genesis's rapid growth is particularly notable. During this period, 11,723 units were sold in the U.S., a 42.6% increase compared to the same period last year. Daishin Securities expects Genesis to record sales of 230,000 units this year, a 14.2% increase from the previous year, driven by lineup and sales region expansion.

The growth of eco-friendly vehicles is also steep. During the same period, Hyundai Motor and Kia sold a total of 273,762 units domestically, of which electric vehicles and hybrid cars accounted for 64,417 units, representing 23.5% of the total. This is a 9.4 percentage point increase compared to the same period last year. Electric vehicle sales reached 22,768 units, more than doubling compared to the same period last year. According to EU-EVs, a site providing electric vehicle registration data for 14 major European countries, Hyundai Motor and Kia's combined market share in the first quarter was 14.6%, ranking third after Volkswagen (19.4%) and Stellantis (15.6%).

Performance outlook for this year is positive. According to FnGuide, securities firms estimate Hyundai Motor's sales revenue this year at 129.7981 trillion won and Kia's at 80.1185 trillion won, representing increases of 10.36% and 14.68% respectively compared to the previous year. A Hyundai Motor Group official said, "Once COVID-19 stabilizes and supply chains are resolved, sales can quickly recover," adding, "This year will be a year to strengthen the eco-friendly vehicle lineup further while pursuing profitability and future growth."

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