Hyundai Motor Group Achieves Record-Breaking Q3 Performance... Exchange Rate Effects Make Q4 Look Rosy as Well

Average Exchange Rate of 1,338 Won in Q3... Exceeding 1,400 Won in Q4
Increase in Completed Vehicle Production Due to Semiconductor Supply Easing

[Asia Economy Reporter Hyunseok Yoo] Hyundai Motor Company and Kia are expected to continue benefiting from exchange rate effects in the fourth quarter, following the second and third quarters. With the exchange rate remaining above 1400 won and production volume increasing, the impact on performance improvement is expected to be significant.

According to the completed car industry on the 6th, in the third quarter, Hyundai Motor recorded a sales revenue effect of 2.745 trillion won due to the exchange rate, while Kia achieved an operating profit effect of 760 billion won. In the second quarter, Hyundai Motor saw a sales revenue increase effect of 2.154 trillion won, and Kia experienced an operating profit increase effect of 509 billion won.

An increase in the exchange rate is favorable for automakers. Since automobiles are one of the representative export industries, they can benefit from the rise in exchange rates. The won-dollar exchange rate has been steadily increasing this year. The average won-dollar exchange rate was 1,205 won in the first quarter, rising to 1,261 won in the second quarter. The average won-dollar exchange rate in the third quarter was 1,338 won, a 15.6% increase compared to the same period last year.

The upward trend in the exchange rate is expected to continue. After surpassing 1,400 won in September, it has remained above 1,400 won since the beginning of the fourth quarter last month. The securities industry has even predicted the upper limit of the exchange rate to reach 1,460 won. Kyuyun Jeon, a researcher at Hana Financial Investment, explained, "The upward trend in the exchange rate is expected to continue until the first quarter of next year," adding, "This is because the US dollar fully reflects the Federal Reserve's rate hikes, and the economic fundamentals of major countries are not favorable."

In particular, Hyundai Motor and Kia are expected to see increased production volume due to improved semiconductor supply in addition to the exchange rate effect. This is a factor that raises expectations for fourth-quarter performance. Hyundai Motor and Kia sold 1,025,000 and 752,000 units respectively in the third quarter on a wholesale basis, representing increases of 14.0% and 9.9% compared to the same period last year. Hyundai Motor and Kia explained that sales volume increased due to improvements in the supply of semiconductors and other parts.

Korea Investment & Securities forecasted that Hyundai Motor and Kia's global sales volume in the fourth quarter would be 1,065,000 and 806,000 units respectively. Hyundai Motor and Kia also projected strong performance in the fourth quarter for these reasons during recent third-quarter earnings conference calls. According to FnGuide, securities firms forecasted Hyundai Motor's fourth-quarter sales revenue and operating profit to be 38.2214 trillion won and 2.9253 trillion won respectively, representing increases of 23.19% and 91.24% compared to the same period last year. During the same period, Kia is expected to improve with sales revenue of 23.8888 trillion won and operating profit of 2.2963 trillion won, up 38.98% and 95.41% respectively compared to the previous year.

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