Hyundai, Kia firm up ranking as world's 3rd; first-half profits improve

South Korea’s top automaker Hyundai Motor Group solidified its position as the world’s third-largest carmaker with improved profit margins in the first half amid a rapid industry shift toward electrification.

The Korean automotive group’s two car-making units – Hyundai Motor Co. and Kia Corp. – together posted first-half sales of 3.66 million units globally, ranking third behind industry leader Toyota Motor Cop.’s 5.42 million units, which includes Daihatsu and Hino cars, and Volkswagen’s 4.37 million vehicle sales.

Stellantis came in fourth with 3.17 million car sales, followed by General Motors Co. with 2.97 million and Ford Motor with 2.17 million.

The Renault-Nissan-Mitsubishi alliance, in the middle of collecting first-half sales figures, is believed to be competing with Stellantis for fourth place.

When combined, Hyundai Motor and its sister firm Kia rose to the world’s third place last year in terms of sales volume and are widening their gap with followers.

The gap between Hyundai Motor Group and Stellantis, which owns brands such as Peugeot and Jeep, has nearly doubled compared to the first half of last year, industry data showed.

OUTPERFORMED ABROAD, POWERED BY EVs

Analysts said the two Korean sister firms effectively managed their parts supply chains despite protracted global automotive chip shortages last year, which contributed to their steady car sales into the first half of this year.

Data showed Hyundai and Kia performed better than their rivals in overseas market sales.

The two Korean companies sold a combined 2.97 million vehicles abroad in the first six months, up 9.9% from the year-earlier period. The world’s No. 1 carmaker Toyota posted a 0.6% year-on-year sales rise.

Hyundai and Kia performed well in advanced markets such as the US and Europe as well as emerging markets including India.

In the fast-growing electric vehicle segment, where Tesla and China’s BYD Co. are leading traditional carmakers, the Korean duo has outperformed their rivals in sales growth.

Hyundai and Kia sold a combined 229,870 EVs globally in the first half, up 24% from a year earlier. Stellantis and Toyota sold 169,000 and 46,171 electric cars, respectively.

HYUNDAI, KIA MAKE MONEY

In terms of profitability, Hyundai Motor Group has established itself as a highly profitable company among mass-market car brands.

As the automobile industry’s landscape is being reshaped around EVs and autonomous vehicles, where heavy investments are essential, Hyundai and Kia are strengthening their status with their fattened war chest.

Hyundai Motor Group’s operating profit margin improved to 10.9% in the first half, up from 8.2% in the year-earlier period.

Except for Stellantis, which owns expensive sports car brands such as Maserati and Alfa Romeo, and posted a 14.4% operating profit margin in the first half, Hyundai Motor Group was the only mass-market car brand to post a double-digit profit margin.

Hyundai and Kia attributed their decent performance to robust sales of premium Genesis cars, expensive SUVs and EVs.

Ford is widely expected to post a $4.5 billion loss from its EV business this year.

Kia, Korea’s second-largest carmaker, is said to be realizing an operating profit margin of 4-6% in its EV segment while Hyundai Motor is eking out smaller profits in its EV business than Kia, industry officials said.

“Although Hyundai and Kia lag Tesla in autonomous driving technology, it is just a matter of time before the Korean firms catch up to Tesla as they boast solid profitability and substantial resources,” said Samsung Securities analyst Yim Eun-young.

Write to Nan-Sae Bin at binthere@hankyung.com

In-Soo Nam edited this article.