Hyundai and Kia prioritise high-profit SUVs amid ongoing disruptions

Hyundai Motor says it’s going to proceed to prioritise manufacturing of higher-profit SUVs and luxurious fashions amid ongoing market volatility and disruptions.

The corporate this week introduced its quarter three enterprise outcomes, headlined by 30 per cent income development and 14 per cent gross sales development. Internet revenue dipped, however attributable to “one-off quality-related guarantee provisions” versus a leaner product combine.

Hyundai’s EV mannequin gross sales additionally surged about 27 per cent from Q3 a yr earlier to round 52,000 items, equal to five.1 % of its whole gross sales quantity.

Nevertheless, the corporate readjusted its annual international gross sales estimate to 4.01 million items from 4.32 million items, as “unstable provide chain circumstances across the globe proceed to weigh on manufacturing”.

“Whereas Hyundai Motor expects a gradual restoration from international chip and part shortages within the fourth quarter, the corporate anticipates exterior uncertainties to proceed, together with inflation, provide chain disruption and fluctuation in uncooked materials costs attributable to geopolitical points,” the corporate added.

“As well as, the corporate expects forex fee volatility in addition to growing advertising prices attributable to fiercer competitors amongst automakers as a burden for the remainder of this yr.”

Hyundai mentioned that its predominant coping mechanism can be to “give attention to the restoration of gross sales via an optimised production-sales plan in international operations that may improve its product combine with SUVs and luxurious fashions to safe sturdy profitability”.

Strip out the company waffle and this implies Hyundai will prioritise its automobiles with the very best revenue margins, pointing to any shortages affecting cheaper automobiles.

This tactic is one mirrored by Kia, which likewise posted good income and gross sales development over Q3, plus retail gross sales of its BEV fashions totalling 40,000 items, a 34.3 per cent improve.

“Kia plans to proceed increasing gross sales of electrified fashions with aggressive fashions such because the EV6 and in addition give attention to excessive margin SUV fashions so as to improve profitability,” the corporate mentioned.

“Moreover, the corporate will proceed bettering the product and trim combine consistent with Kia’s enhanced model notion,” it added – suggesting a give attention to top-of-the-range fashions, which may doubtlessly be excellent news for these on EV6 and Sorento wait lists…

MORE: Kia’s fast development tracked, because it overtakes Hyundai in Australia