[Click eStock] "Hyundai Glovis, Concerns Over Group's US Production Expansion Are Excessive"

Tendency for Simultaneous Growth in U.S. Production and Korean Exports of Finished Vehicles

Hyundai Motor Group's increased production in the United States is not expected to significantly burden Hyundai Glovis' performance, according to an analysis. Even if U.S. production rises, it does not lead to a decrease in exports from Korea, and increased overseas production could also drive growth in contract logistics.

On the 27th, Hana Securities maintained Hyundai Glovis' target stock price at 164,000 KRW and an investment rating of 'Buy' based on this background. Although there are concerns that increased production by Hyundai Motor and Kia in the U.S. might reduce finished vehicle ocean transport (PCTC) sales, this view is considered excessive.

In fact, even as Hyundai Motor and Kia increased overall overseas and U.S. production, export volumes from Korea did not decline. Over the past five years from 2020 to 2024, Hyundai Motor and Kia's overseas production excluding China rose from 2.54 million units to 3.38 million units, a 33% increase. During the same period, the volume produced in Korea and then exported increased from 1.56 million units to 2.18 million units, a larger growth rate of 40%.

In the U.S., wholesale sales increased from 1.24 million units in 2020 to 1.85 million units last year, a 49% rise, while domestically produced and exported volumes grew from 590,000 units to 1.01 million units, a 74% increase during the same period. This indicates that strong sales of Hyundai Motor and Kia in the U.S. have simultaneously boosted both U.S. production and exports from Korea.

Hana Securities expects Hyundai Glovis to respond to any reduction in U.S.-bound exports due to tariffs by shifting volumes to other regions. Hyundai Glovis' PCTC sales increased by approximately 135%, from around 1.7 trillion KRW in 2020 to about 4 trillion KRW last year. This growth is attributed to increased finished vehicle exports, a higher share of export volumes handled, product mix improvements, exchange rate effects, and expansion of volumes from other clients. Notably, Hyundai Glovis is increasing volumes from other clients whose demand exceeds PCTC supply.

Song Seon-jae, a researcher at Hana Securities, explained, "While PCTC accounted for 14% of Hyundai Glovis' sales last year, contract logistics (CKD) made up 40%, and overseas logistics accounted for 28%. As overseas production of finished vehicles increases, it is difficult to procure 100% of parts locally, so CKD volumes produced domestically and exported will rise, and inland transportation of parts and finished vehicles will increase, expanding overseas logistics."