"Second Half Not Easy" Hyundai Motor and Kia Executives to Meet in Gyeongju on 22nd

Chairman Chung Eui-sun of Hyundai Motor Group (center), President Jang Jae-hoon of Hyundai Motor Company (left), and Jose Munoz, Chief Operating Officer and Head of North America Division of Hyundai Motor Group, who participated in the New York International Auto Show held in April this year.

[Asia Economy Reporter Choi Dae-yeol] Hyundai Motor Company and Kia's top executives and overseas division heads will come together on the 22nd to discuss production and sales strategies for the second half of this year.

Given the ongoing parts supply shortages caused by COVID-19 and persistent geopolitical risks, it is expected that they will focus on devising more sophisticated internal and external management strategies. In particular, as electrification is rapidly advancing in key markets such as the United States and Europe, where Hyundai Motor Group has recently been concentrating, they are also anticipated to exchange views on proactive measures to address these changes.

According to industry sources on the 19th, this global regional headquarters meeting will be held at Hyundai Motor Group's Human Resources Development Center in Gyeongju, chaired by each company's CEOs, including Hyundai Motor President Jang Jae-hoon and Kia President Song Ho-sung. The facility was completed in the first half of 2020 and had been used as a COVID-19 patient treatment center but has been restored to its original purpose since May. Both companies hold meetings approximately twice a year where global regional headquarters and production and sales representatives from around the world gather.

Both Hyundai Motor and Kia posted decent sales results in the first half of this year. Despite ongoing imbalances in vehicle semiconductor supply, the invasion of Ukraine, and sporadic adverse events such as renewed COVID-19 outbreaks and lockdowns in China, production disruptions were relatively less severe compared to other automakers. In the United States, considered a key market, they have firmly secured the fifth position in market share based on manufacturer standards.

In Europe, despite the overall contraction of the complete vehicle market, they performed well. They recorded the highest sales ever in the first half of the year, even increasing sales volume. During this period, their European market share rose to 9.9%, surpassing Renault to climb to third place. The industry expects that sales of high-priced vehicles such as large models like SUVs and eco-friendly cars significantly improved financial performance. Although the Russian plant was shut down due to parts supply issues, production disruptions were minimized by redirecting parts to nearby regions.

Song Hoseong, CEO of Kia

With the added effect of exchange rates, the results were not bad, but it is not easy to relax the reins. The suspension of operations at the Russian plant, one of the core regions, is approaching six months, and the sluggish performance of the Chinese business is struggling to find a turnaround. The outlook for the global economy after the second half of the year is also largely pessimistic. As concerns over soaring inflation rise in each country, interest rates are being raised in succession as a response. With rising production costs due to surging raw material prices and fears of an economic downturn, consumers are more likely to tighten their wallets.

Since large-scale facility investments are planned for the second half of this year, mid- to long-term plans linked to each region and local market conditions are expected to be refined further. In particular, preparations are needed for the refurbishment of the eco-friendly vehicle production line scheduled in the United States by the end of this year, as well as preliminary work for new plant projects in Korea and the United States starting next year. As electrification accelerates with rapid increases in electric vehicle sales in major markets centered on global automakers, optimizing the production and deployment timing of dedicated electric vehicles such as the Ioniq and EV series is also considered an important task.

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