Hyundai, Kia expected to maintain turnaround momentum this year: S&P

All News 08:17 January 24, 2020

SEOUL, Jan. 24 (Yonhap) -- South Korea's top two carmakers -- Hyundai Motor Co. and its affiliate Kia Motors Corp. -- are expected to maintain turnaround momentum this year on the back of improving sales and cost-cutting efforts, international ratings agency Standard and Poor's said Friday.

Sales at Hyundai and Kia, which reported a 3-percent drop in their combined global sales last year, appeared to bottom out in 2019 and a turnaround is likely in 2020, S&P said in a recent report.

"Performance during the first nine months of 2019 showed signs of recovery from the weak levels in 2018," the ratings agency said.

"The improvement is off a low base impact. The companies' improving sales mix, diversified geographical presence, and cost-cutting efforts will more than offset increasing negative pressure of a tough business environment," it said.

"The companies' efforts to catch up with the growing popularity of SUV models through new model launches will continue to enhance its overall product competitiveness over 2020-2021," it said.

Earlier this month, Hyundai and Kia said they are targeting sales of a combined 7.54 million vehicles this year, a 4.8 percent increase from a year earlier.

In 2020, Hyundai Motor aims to sell 4.58 million vehicles and Kia targets to sell 2.96 million units in global markets.

The two carmakers sold a total of 7.19 million vehicles in 2019.

This week, Hyundai said it returned to the black in the fourth quarter of last year, helped by an improved product mix and a weak won.

For the October-December quarter, Hyundai Motor posted a net profit of 851.2 billion won (US$730 million), shifting from a net loss of 203.3 billion won a year earlier, the company said in a statement.

Kia also said its fourth-quarter net profit more than tripled compared to a year earlier on an improved product mix and a weak won.

Net profit for the October-December period soared to 346.4 billion won from 94.3 billion won a year ago, Kia said.