Hyundai Motor and Kia achieved outstanding financial performance in the first quarter of 2024 while facing challenges such as soft battery EV growth, high interest rates, and geopolitics. Hyundai plans to expand hybrid EV production, which contributed significantly to its sales.
According to South Korea-based Dailian and The Korea Economic Daily, Hyundai reported KRW40.7 trillion (US$29.95) in revenue for the first three months of 2024, up 7.6% from the previous year. The company achieved KRW3.56 trillion in operating profits, a 2.3% decrease year-on-year.
Kia reported KRW26.2 trillion in revenue and KRW3.43 trillion in operating profits, with annual growth rates of 10.6% and 19.2%. Kia and Hyundai both achieved record-high revenue in the first quarter of 2024.
In the past three months, Hyundai halted production at its Asan plant in South Korea to prepare for EV manufacturing. Its global sales declined by 1.5% to 1.67 million units in the first quarter, affecting its operating profits.
However, Hyundai saw the portion of HEV sales increase notably. Sales in major markets like North America and India also kept rising. Therefore, the automaker could maintain strong revenue. Sales of Hyundai's Eco-friendly cars decreased by 4.8% year-on-year in the first quarter of 2024 due to the sluggish demand for BEVs.
Kia's sales volume for the first three months of this year was over 760,000 units, down by 1% from last year. However, its revenue and operating profits increased because of factors like the growing portion of Eco-friendly car sales and RVs and the rising average selling prices. Kia sold 157,000 Eco-friendly cars in the first quarter, an increase of 18.1% year-on-year due to the growing HEV volume.
Hyundai to add HEV production at new US plant
Hyundai plans to grow its Eco-friendly car sales with the Ioniq series and the new-generation HEV models. It will also expand market share and enhance profitability with a product mix centering on SUVs and high-added-value vehicles.
Kia said it will form flexible production plans driven by demand and maintain an appropriate inventory level as competition heats up and the EV market slows. Seung Jo Lee, Hyundai's senior vice president of the HMC planning and finance division, recently said at an earnings call that the company aims to add HEV production lines at its EV plants in Georgia, the US, which will start operation by the end of 2024.
Jose Munoz, Hyundai's COO and president of HMC North America, previously said the company was discussing whether to produce HEVs or plug-in hybrid EVs at the Georgia plant. The South Korean automotive industry had suspected that Hyundai would unlikely add HEV production at the factory because additional production lines would have to be set up. It could take Hyundai several hundred billion South Korean Won.
Hyundai officially announced that it will also manufacture HEVs at the Georgia plant, showing its confidence in the HEV market. According to Lee, HEV sales are growing significantly. Hyundai will increase investment in the US to expand HEV production in response to the need.
