[News Article] Hyundai Motor, Kia to extend earnings rally in 2024 with diversified hybrid, EV lineu…
Hyundai Motor, Kia
to extend earnings rally in 2024 with diversified hybrid, EV lineups Two carmakers post
record-high operating profits in 2023 By Lee Min-hyung,
The Korea Times - Hyundai Motor and Kia will focus on diversifying their
lineups of hybrid and electric vehicles (EV), as part of their key management
strategy for 2024, the nation’s two leading automakers said in a regulatory
filing on Thursday, after releasing stellar earnings results. Both automakers
surprised investors with drastic profit growth last year. They placed their
names on the first and second-most profitable firms in terms of operating
profit in 2023, respectively, overtaking Samsung Electronics for the first time
14 years. Hyundai Motor said
it will carry out a two-track growth strategy by improving the product mix of
its value-added SUV and luxury vehicles and expanding lineups for eco-friendly
cars to repeat its winning streak in earnings this year. According to the
regulatory filing, the nation’s leading automaker generated a record annual
operating profit of 15.12 trillion won ($11.3 billion) in 2023, up 54 percent
from a year ago, buoyed by its overall auto sales growth and improved
profitability from sales of value-added vehicles. The automaker also set a
history by reporting sales of 162.66 trillion won, up 14.4 percent, during the
same period. Hyundai Motor plans
to continue raising the global brand identity of its flagship IONIQ EV lineup
and expanding its hybrid models, with a view to attracting growing demand for
eco-friendly vehicles here and abroad, the company said. The automaker will also
keep improving profitability by enhancing the market share for its flagship
SUVs, such as Tucson, and luxury vehicles sold by its premium brand, Genesis. “We will keep up the
growth momentum this year by improving the product mix and driving innovation
in production costs, despite lingering external uncertainties triggered by
volatile exchange rates, high interest rates and global economic slowdown,” Koo
Za-yong, senior vice president and head of investor relations at Hyundai Motor,
told investors during a conference call. The automaker also
shared plans to expand investments by 3.3 percent this year to 12.4 trillion
won to speed up its transition into a software-defined vehicle (SDV)
manufacturer. Kia, another auto
affiliate of Hyundai Motor Group, also impressed investors with drastic
earnings growth. According to its regulatory filing on the same day, the
company reported an operating profit of 11.6 trillion won last year, up 60.5
percent from the previous year. Its sales also jumped by 15.3 percent to 99.8
trillion won during the same period. The automaker also
placed its top management focus on strengthening its hybrid and EV lineups. Sales of
eco-friendly cars accounted for 19.9 percent out of the total during the fourth
quarter of last year, up 2.9 percentage point from a year earlier. This was
driven by robust sales of its key hybrid lineups, such as Sorento and Sportage. Joo Woo-jeong,
executive vice president and chief financial officer at Kia, expressed rosy
outlook for the hybrid vehicle market. “We have completed
hybridization of our mainstream auto lineups, and will continue to turn the
remaining models – such as Seltos – into ones powered by hybrid electric
vehicles (HEV),” Joo told investors during the conference call. “Demand for
HEVs surpass its supply, so we are making multifarious efforts to satisfy the
demand. Hybrid vehicles were once considered ones deteriorating automakers’
profitability, but this is not the case anymore. They contribute a lot to
enhancing our profitability and raising the overall market share.” Kia also plans to
strengthen its footing in the global EV industry with plans to launch cheaper
lineups this year. The automaker is scheduled to launch price-competitive
compact EV3 in June. Sales for its EV9 flagship SUV will be in full swing in
North America in 2024, so the automaker expected its EV sales this year to rise
by 50 percent from the previous year. For this year, the
automaker shared its aggressive earnings vision of attaining 1 trillion won in
monthly operating profit by pushing ahead with the two-track growth strategy
focusing on HEVs and EVs. It also expected its total auto sales to jump by 3.6 percent
in 2024 to 3.2 million. Source: https://www.koreatimes.co.kr/www/tech/2024/01/419_367627.html
2024.01.26
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