Luxury autos, EVs to fuel Hyundai’s China, U.S. revenue in 2021 Q4 profit jumps

By Heekyong Yang and Joyce Lee

a wheel of a car: FILE PHOTO: The wheel cover of a Hyundai Genesis is seen during the Chicago Auto Show

© Reuters/John Gress
FILE Picture: The wheel protect of a Hyundai Genesis is noticed during the Chicago Auto Demonstrate

SEOUL (Reuters) – Hyundai Motor Co said on Tuesday it expects profits in United States and China to surge this 12 months, driven by the start of new electric cars and trucks and sports activities utility cars (SUVs), just after reporting its very best quarterly earnings in in excess of a few years.

Hyundai’s getaway-quarter profit jumped 57% on more demand from customers for premium-margin SUVs, but over-all product sales volumes fell 5% amid a broader financial weakness because of to the COVID-19 pandemic.

The promising outlook is a testament to Hyundai’s big electric powered automobile (EV) press. The business, which collectively with affiliate Kia Corp is among the world’s best 10 automakers, is quickly predicted to introduce an EV-only platform that will use its very own battery technological know-how to reduce time and charges.

Hyundai, even so, did not present on its earnings connect with any update on a short while ago noted talks between it and Apple Inc about an electric car and battery tie-up.

On income, the automaker explained it expects a 12% jump in its most significant market, North The usa, in 2021. Its income in the fourth quarter finished December slipped 2% in the location.

“With our lineup with new versions ready to start in the United States, we aim to raise our marketplace share to 4.8% this 12 months,” Senior Vice President Koo Za-yong reported on the get in touch with.

Very last year, the firm managed to a little bit advance its U.S. sector share to 4.4%, aided by sales of the Palisade SUV and Kona EV, he explained, regardless of a 10% fall in revenue.

Analysts assume a enhance to Hyundai’s EV product sales this 12 months in spite of a world-wide remember of Kona Electric powered owing to fires.

Hyundai said it expects gross sales to soar 28% in China, the world’s leading automobile market exactly where it also designs to release the electric powered model of its Mistra sedan this yr.

“Past year, Hyundai generally didn’t do significantly in China, though other automakers launched new versions as the Chinese automobile current market observed a speedy recovery amid the pandemic … Hyundai’s China system would seem to emphasis on electric powered automobiles,” explained Lee Han-joon, an analyst at KTB Expense & Securities.

Hyundai expects to promote 562,000 motor vehicles in China in 2021, and estimates income in North The united states will jump to 909,000.

Most effective QUARTER Because 2017

In the fourth quarter, Hyundai attained 1.3 trillion won ($1.18 billion), the greatest because at the very least early 2017.

But it fell short of an regular analyst estimate of 1.5 trillion gained, compiled by Refinitiv, because of to a sturdy gained.

The South Korean forex rose about 7% in opposition to the greenback in the 3 months to December. A more powerful received erodes the value of overseas revenue for South Korean firms.

Hyundai shares, up more than a 3rd this thirty day period led by information of the Apple tie-up, fell about 3% on Tuesday.

The broader KOSPI was down 2%.

Hyundai’s quarterly profits rose 5% to 29.2 trillion received as it noticed reliable demand from customers for its vehicles in the United States and emerging markets this sort of as India irrespective of the pandemic.

Whilst desire for its vehicles from motor vehicle-rental organizations that acquire in bulk is nonetheless tepid, analysts claimed, gross sales of its luxurious cars and trucks are envisioned to stay a vivid spot.

Hyundai experienced sent a loss in the October quarter as it provisioned for a big engine-quality relevant bill.

“Hyundai had a fantastic fourth quarter, primarily in the United States, where larger normal-marketing-selling price cars this sort of as SUVs noticed raising demand from customers as buyers shun public transit due to the fact of COVID-19 and small gasoline costs,” KTB’s Lee explained.

“Holiday break discounts helped as nicely.”

(Reporting by Heekyong Yang and Joyce Lee Enhancing by Sayantani Ghosh and Himani Sarkar)

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