Hyundai, Kia post record sales in the US, poised to overtake Toyota

Hyundai Motor Co. and Kia Corp. saw their monthly car sales rise to record highs in the US where carmakers will soon be ineligible for state subsidies for electric vehicles made outside North America.

The two South Korean automakers on Friday posted robust US sales growth in August while most of its rivals reported lackluster or declining sales amid a continued automotive chip shortage.

Hyundai Motor America said it sold a record 69,437 vehicles, including the premium Genesis brand, last month, up 13.5% from the year-earlier period. Kia America also announced its best-ever August sales of 66,089 units, a 22.4% year-on-year gain.

The growth contrasts with their Japanese rivals' declining sales.

Toyota Motor Corp. posted a 9.8% on-year sales decline in the US market while Honda Motor Co. reported a 37.7% fall.

Hyundai and Kia, the two automaking units of Hyundai Motor Group, sold a combined 135,526 vehicles, ranking fourth after GM, Toyota and Ford.

With the sales figures, the Korean duo’s US market share is estimated to have reached a record 12%, industry officials said.

ONLY A MATTER OF TIME BEFORE HYUNDAI OVERTAKES TOYOTA

Back in 2015, Toyota sold 2.5 million cars in the US while Honda sold 1.58 million units. Without any SUV model, Hyundai and Kia were far behind them with combined sales of 1.38 million cars.

The latest data, however, showed the Korean carmakers are quickly catching up to their archrival Toyota, which sold 169,626 cars in August – just 34,000 units more than the Korean duo’s sales figures.

Honda, with 71,461 cars sold last month, has been trailing the Hyundai Motor Group since last year.

As of July, Hyundai’s luxury Genesis cars were selling at $60,573 a unit, higher than Lexus’ $55,801. Honda's premium brand Acura was selling at $52,879.

The incentives Hyundai and Kia provide to their dealers are also among the lowest in the US, meaning stronger demand for Korean cars from consumers.

Hyundai's and Kia’s dealer incentives were $490 and $582, respectively, in July, compared with Toyota's $754, Volkswagen's $1,103 and Stellantis’ $1,949.

GREEN CAR SALES CLIMB

Hyundai and Kia said they posted strong growth, particularly in green car sales, including electric vehicles.

The two companies’ EV sales, which have posted triple-digit growth since the start of the year, more than doubled to 4,078 units in August.

Sales of their entire eco-friendly cars, including hydrogen vehicles and hybrids, stood at 14,903 units, up 79.3% from August of last year.

“We’re seeing inventory begin to rebound, which resulted in strong sales this month,” said Randy Parker, chief executive of Hyundai Motor America. “Despite estimates of an overall industry decline, our sales were driven by high demand for our product line of SUVs and eco-friendly vehicles.”

Hyundai’s IONIQ 5 crossover and the Kia EV6 led the decent EV performance with their US sales reaching 1,516 units and 1,840 units, respectively.

“Achieving a best-ever August sales performance is a testament to the strength of our product lineup,” said Eric Watson, vice president in charge of Kia America’s sales operations. “We are optimistic that production through the end of the year will improve.”

 

GROWING CHALLENGE

Hyundai and Kia are among the automakers with the most to lose from new rules – the Inflation Reduction Act – which was signed into law earlier this month, halting subsidies for EVs made outside the US.

The popular IONIQ 5 and EV6 models are all manufactured in Korea and exported to the US.

Industry officials said given the growing popularity of Korean EVs, Hyundai and Kia will be able to compete with the likes of Tesla, GM and Ford, which are expected to receive $3,750 in subsidies.

Hyundai Motor Chairman Chung Euisun flew to the US earlier this week to meet government officials and business leaders.

He visited the US state of Georgia, where Hyundai is building an EV plant, and requested additional incentives from the Georgia government for the construction of the factory, according to industry sources.

“One of the fastest solutions to the IRA issue is to turn Hyundai’s internal combustion engine car lines in Alabama and Georgia into ones that make electric vehicles,” said Kim Pil-soo, professor of automotive engineering at Daelim University.

Write to Il-Gue Kim, Han-Shin Park and Hyung-Kyu Kim at Black0419@hankyung.com
In-Soo Nam edited this article.