[Asia Economy Reporter Changhwan Lee] Despite the severe shortage of automotive semiconductors, Hyundai Motor Company and Kia achieved solid third-quarter results centered on high-profit models such as Genesis, SUVs (Sport Utility Vehicles), and new electric vehicles.
According to Hyundai Motor and Kia on the 28th, the combined third-quarter sales of the two companies reached 46.62 trillion KRW, a 6.2% increase compared to the same period last year. During the same period, combined operating profit also turned positive, reaching 2.9337 trillion KRW.
The improvement in performance is considered more meaningful as it was achieved under adverse conditions where production volume decreased due to the shortage of automotive semiconductors, leading to a decline in sales volume. Hyundai Motor's global vehicle wholesale sales in the third quarter decreased by 9.9% year-on-year to 898,906 units. During the same period, Kia also only managed to sell 684,413 units, down 2.1% from the previous year.
It is analyzed that both companies were able to improve their performance as sales increased mainly for high-profit popular models. Hyundai Motor's luxury brand Genesis sold 144,000 units in domestic and overseas markets from the first to the third quarter, a 57% increase compared to the same period last year, led by the new GV70 and G80. The increase in sales of the dedicated electric vehicle Ioniq 5 also contributed to the performance improvement.
Kia's high-profit RVs (Recreational Vehicles) such as Sorento, Carnival, and Seltos boosted profitability. The sales of these models increased significantly in the third quarter of this year, raising the wholesale sales ratio of RVs (excluding China) by 1.1 percentage points to 58.7% compared to the same period last year.
Kia also showed remarkable sales growth in the Indian market, which it entered in the third quarter of 2019. Wholesale and retail sales in the Indian market increased by 3.5% and 57.9%, respectively, compared to the same period last year.
Although the third-quarter performance improved despite adverse conditions, the shortage of automotive semiconductors is expected to continue for the time being.
A Hyundai Motor official said, "The shortage of semiconductors for some items is expected to gradually improve from the fourth quarter of this year," but added, "Overall, the impact of the semiconductor shortage will continue, so it will take time to normalize production."
Hyundai Motor Group Chairman Chung Euisun also supported this outlook. Meeting with reporters at Gimpo Airport after returning from an overseas business trip the day before, Chairman Chung said, "The semiconductor supply is not smooth, so the results were not as good as expected," and added, "I think the situation will ease only by the first quarter of next year."
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