Automobile Stocks Accelerating in the Green New Deal

Government's 'Green New Deal' Announcement Drives Hyundai and Kia Motors Upward
Hydrogen Vehicle Infrastructure Expansion and R&D Support Act as Positive Factors

On the 14th, citizens are watching President Moon Jae-in's 'Korean New Deal National Report Conference' in the waiting room of Seoul Station. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Minwoo Lee] The stock prices of the automobile industry are fluctuating due to the government's New Deal policy.

According to the Korea Exchange on the 15th, as of 9:37 a.m., Hyundai Motor's stock price recorded 108,000 won, up 6.4% from the previous day. Although it dropped to 98,300 won on the last trading day of the previous week, the 10th, it rose 9.9% this week, recovering to the 100,000 won level. Kia Motors' stock price is also on the rise. At the same time, it was traded at 35,600 won, up 4.7% from the previous day. It rose 11.1% compared to the closing price of the previous week (as of the 10th). This is the first time since May 29 that Kia Motors' stock price has risen for three consecutive days.

It is analyzed that the inclusion of the automobile industry in the detailed policies of the 'Korean New Deal' policy, in which the government will invest a total of 160 trillion won over five years, acted as a positive factor. On the previous day, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki reported this comprehensive plan at the 'Korean New Deal' briefing hosted by President Moon Jae-in at the Blue House. Among the three main pillars?Digital New Deal, Green New Deal, and strengthening the employment social safety net?the Green New Deal included support measures for electric and hydrogen vehicles. To spread low-carbon and distributed energy, the plan is to supply 1.13 million electric vehicles and 200,000 hydrogen vehicles, and invest 13 trillion won to support the early scrapping of 1.16 million old diesel vehicles.

While the previously announced hydrogen vehicle and mobility roadmap set targets for 2022, this time the plan firmly established the goal through 2025 and a long-term commitment to the policy. The industry reacts that since the hydrogen economy is currently in a budding stage where the government's role is crucial, the continuation of nurturing policies is significant. Especially in the automobile industry, the electric and hydrogen vehicle sectors steadily grew even during the harsh first half of the year when overseas production plants were shut down due to COVID-19, suggesting that they could gain even more momentum going forward.

According to Hyundai Motor Group, last month’s total global automobile wholesale sales were 506,000 units. Although this is an 18.0% decrease compared to the same month last year, it increased 29.3% from the previous month. In particular, global eco-friendly vehicle sales such as Plug-in Hybrid Electric Vehicles (PHEV), Battery Electric Vehicles (BEV), and Fuel Cell Electric Vehicles (FCEV) are steadily increasing. Shipments of these eco-friendly vehicles recorded 23,549 units (19,748 domestic, 3,801 overseas), a 96% increase compared to the same month last year. Hyundai Motor and Kia Motors increased by 28% and 194%, respectively, compared to the same month last year.

Jinwoo Kim, a researcher at Korea Investment & Securities, said, "Through the COVID-19 crisis, the automobile industry is becoming more competitive between countries," and added, "Active national support such as the Korean New Deal is expected to help secure competitiveness in future vehicles."