Hyundai Motor: Stall in Chinese market: Chinese sales down 31% year-on-year
Hyundai Motor 3Q Financial Results:
On October 26, we announced our financial results for the July-September period.
The business conditions of the company are more severe than it looks.
Sales trends by region:
First, the sales trends by region are eye-catching.
In particular, it cannot be overlooked that sales in China were down 31% year-on-year.
Sales in Europe and the United States also decreased.
On the other hand, sales in India, Russia and South Korea increased.
Reasons to focus on China:
There are two reasons to focus on China.
First point: Recovery of new car sales in China
The momentum of recovery in new car sales in the Chinese market is strong.
From April to September, the replacement demand for automobiles, which has been endured so far, is recovering in China.
The pace of demand recovery is faster than in other countries.
Second point: High-priced models are popular
High-priced models are gaining popularity in China.
In fact, Toyota’s Lexus brand is selling well.
Until September, Toyota’s sales in China increased for the sixth straight month.
Toyota is agile in responding to the Chinese government’s focus on HVs as fuel-efficient vehicles.
Hyundai Motor’s response:
It looks very different from Toyota.
Chinese market:
In the Chinese market, where demand has returned, “Hyundai Motors may have difficulty meeting consumer needs.”
India and Russia:
The growth in unit sales in India and Russia has “established the position of Hyundai Motor, centered on low-end models.”
brand image:
If this brand image increases in each country, it will not be easy for Hyundai Motor to aim to improve profits as a high-priced, high-end brand.
Anxiety about Hyundai Motor’s technological capabilities:
Theta 2 engine ignition:
In addition, concerns about the basic technological capabilities of Hyundai Motor have increased.
In the past, Hyundai Motor’s Theta 2 engine has been reported to ignite.
This time, the company reaffirmed the defect in the engine and made a provision in the financial results for the July-September period.
That is also a major factor in the deficit settlement.
Kona Electric Fire:
In addition, Hyundai Motor’s EV, “Kona Electric,” which is regarded as a catalyst for growth, has been recalled due to a fire accident.
Diamond online
https://diamond.jp/articles/-/252939
Hyundai Motor: Loss in Q3 (Korea)
Korean Hyundai Motor:
On October 26, the company announced its financial results (consolidated basis) for the third quarter of 2020 (July-September).
Sales increased by 2.3% year-on-year to 27,576 billion won (about 2,537 billion yen)
Operating profit / loss and final profit / loss (see Appendix Table 1)
The losses were 314 billion won and 189 billion won, respectively.
Third quarter sales:
Sales of luxury cars and other products increased due to strong sales.
Operating profit and loss:
Due to the recording of additional reserves for improving engine safety, the company fell into the red.
Worldwide sales:
It decreased by 4.9% from the same period of the previous year to 1,025,000 units.
By country / region
United States (down 1.9%, 175,000 units),
Western Europe (down 5.9%, 129,000 units),
China (down 28.9%, 115,000 units),
Brazil (down 14.8%, 44,000 units)
India (up 9.2%, 122,000 units),
Russia (up 13.6%, 50,000 units),
In Korea:
Due to the reduction of individual consumption tax, etc., it increased by 21.9% to 199,000 units (see Appendix Table 2).
–JETRO
https://www.jetro.go.jp/biznews/2020/10/ae3e753d688b51e8.html