Hyundai·Kia Motors Stock Price Increase Rate Twice That of KOSPI... Outlook Divided

Hyundai Motor Company and Kia's stock price growth rates have outperformed the KOSPI since the beginning of the year. While Hyundai Motor Group announced a 24 trillion won investment plan for electric vehicles, stock price forecasts vary somewhat.

President Yoon Suk-yeol visited Hyundai Motor's Ulsan plant on the 9th of last month and toured the interior while being guided by Chung Eui-sun, Chairman of Hyundai Motor Group. [Image source=Yonhap News]

원본보기 아이콘

According to the Korea Exchange on the 13th, Hyundai Motor's stock price rose 26.2% from 157,000 won to 198,200 won between January 2 and April 12 this year. Kia surged 38.2% from 61,500 won to 85,000 won. These returns are higher than the KOSPI's increase of 14.6% during the same period.

The stocks of these companies were driven by foreign and institutional investors. During the same period, foreigners and institutions net purchased Hyundai Motor shares worth 839.023 billion won and 146.619 billion won, respectively. Individual investors alone net sold 981.395 billion won. For Kia, foreigners and institutions net purchased 387.221 billion won and 281.476 billion won worth of shares, respectively, while individuals net sold 1.158 trillion won.

The steadily rising stock prices of Hyundai Motor and Kia since the beginning of the year gained momentum following Hyundai Motor Group's announcement of its electric vehicle investment plan on the 11th. The main point is to increase domestic electric vehicle production capacity fivefold by 2030 compared to the current level. Expectations have grown that Hyundai Motor Group will escape undervaluation as it raises its electric vehicle sales targets.

Hyundai Motor set its electric vehicle sales targets at 330,000 units in 2023, 793,000 units in 2025, and 2.04 million units in 2030. During the same period, Kia plans to raise its targets to 254,000 units, 610,000 units, and 1.6 million units, respectively.

원본보기 아이콘

Yoo Ji-woong, a researcher at Daol Investment & Securities, analyzed, "Hyundai Motor and Kia's global electric vehicle market share is estimated to be 12.6% in 2026, which significantly exceeds the expected 9% market share in 2023." He added, "With this investment plan, upward revisions of global and regional electric vehicle business plans will continue, leading to an increase in corporate value."

However, some analyses suggest that it will take time for the global electric vehicle market share to increase significantly despite aggressive domestic and overseas investment plans. This is because competition is fierce in key electric vehicle sales regions such as the United States and Europe. Hyundai Motor and Kia's global electric vehicle market share remained at around 4.7% last year. During the same period, their combined market share including internal combustion engine vehicles was 8.8%. Kim Pyeong-mo, a researcher at DB Financial Investment, pointed out, "Hyundai Motor and Kia's electric vehicle market share in the U.S. as of March 2023 declined by 1.6 percentage points year-on-year to 5.8%. This is due to the Inflation Reduction Act (IRA) implemented since last year and competitors' electric vehicle price cuts."

Researcher Kim Pyeong-mo diagnosed, "Hyundai Motor and Kia are responding by increasing lease sales to fleets (commercial vehicles), but general consumers cannot benefit from tax incentives. Until the Hyundai Motor electric vehicle plant in the U.S. starts production at the end of 2024, there is no clear countermeasure."

In Europe, Hyundai Motor and Kia's electric vehicle market share is stagnating. Their market share in the European electric vehicle market was 12.7% in 2021. However, it has been declining since then and is expected to fall to 9.1% this year. An automotive industry insider said, "The poor sales of the Ioniq 5 and EV6 launched in 2022 affected the market share. It will be difficult to expect a rebound in market share until electric vehicles in segments preferred by European consumers are launched."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.