Hyundai’s extra gear is short on staying power
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Katrina Hamlin
HONG KONG, July 26 (Reuters Breakingviews) -Hyundai Motor Co 005380.KS is enjoying a moment in the sun. Net profit at Korea's largest carmaker zoomed ahead by 23% last quarter. But it could be hard to sustain the pace.
Record earnings of 4 trillion won ($2.9 billion) stood out after rivals as diverse as General Motors GM.N, Ford Motor F.N, Nissan Motor 7201.T, Stellantis STLAM.MI and Tesla TSLA.O all reported lacklustre results for the three months to the end of June. Sagging demand in North America, especially for battery-powered cars, was a recurrent theme, as was the cost of using larger incentives to empty swelling inventories.
Hyundai’s performance offered a respite from the doom and gloom: wholesale deliveries in the U.S., its largest market, actually increased 15.2% from last year's second quarter. That was helped by booming demand for hybrids, sales of which grew 45%, as well as SUVs, which accounted for around three-quarters of all vehicles the company delivered in the United States. Those trends boosted the bottom line: SUVs usually command higher margins, and hybrids' profitability is "not much different" from internal combustion engines, management said. An array of fresher models like the 2024 Santa Fe also meant it was less dependent than rivals on deals and discounts to shift stock.
Despite so much encouraging news, and the striking contrast with its peer group, Hyundai’s shares had nonetheless fallen nearly 6% by Friday's close since Wednesday, before results were released. That suggests investors struggle to dismiss fears Hyundai will succumb to the problems plaguing its rivals.
It will certainly take a skilled driver to navigate what comes next. Falling rates and inflation could weigh on would-be buyers. Auto sales in North America will grow just 3.4% year-on-year in 2024, Nomura estimates, far lower than last year's 13% jump; globally, industry growth will slide to just over 2%, from close to 10%.
While Hyundai has demonstrated remarkable resilience so far, it will be hard to hone that edge. Others can probably start to emulate some of its more successful strategies by adjusting their own lineups. In March, Nissan vowed to enter the market for popular plug-in hybrids. Looming U.S. elections present another headache: twists and turns in policies on battery-powered vehicles make it difficult to plan an appropriate portfolio of products for the years ahead.
Hyundai’s current American dream may be short-lived.
Follow @KatrinaHamlin on X
CONTEXT NEWS
Hyundai Motor Co on July 25 reported net profit of 4 trillion won ($2.9 billion) in the quarter to the end of June, up 22.7% from the same period last year. Revenue rose 6.6% to 45 trillion won over the same period.
Share fell 3% to close at 251,500 won on July 25, before dropping a further 3.2% on July 26.
($1 = 1,386.2200 won)
Graphic: Hyundai's global hybrid sales are charging up https://reut.rs/4fd7RVX
Editing by Antony Currie and Aditya Srivastav
Aset Terkait
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
