Kia and Hyundai Motor's headquarters in Seocho District, southern Seoul are pictured on Jan. 25, 2024.
Kia’s sales were driven by strong demand for eco-friendly models and SUVs, with 772,648 vehicles sold outside Korea, exceeding the 2014 record of 769,917 units. Popular models included the EV3, Sportage, and Sorento. A Kia official stated: “A pull-forward in U.S. demand ahead of expected tariffs and robust growth in emerging markets like India helped boost global sales.” Favorable exchange rates also supported revenue growth.
However, profitability declined due to increased competition in North America and Europe, raising incentives to 444 billion won in impact. A reduced sales mix of high-margin electric SUVs, like the EV9, cost 369 billion won in profits. Kia CFO Kim Seung-jun noted: “Kia’s average incentive per vehicle in the United States rose from $1,100 last year to $2,000 this year.” The transition of EV6 and EV9 production to Georgia also temporarily affected earnings.
Hyundai Mobis, an auto parts affiliate, recorded its best-ever quarter with 14.75 trillion won in revenue and 776.7 billion won in operating profit, up 6.4% and 43.1% respectively. A spokesperson said: “Growth in high-value electronic components and favorable exchange rates in the global aftersales business supported our performance.” Combined global sales by Hyundai and Kia reached 1.77 million units, with eco-friendly vehicle sales rising 24.4% to 386,426 units, boosting demand for advanced parts.
New U.S. tariffs, effective April 3, pose challenges for the second quarter. A 25% tariff on imported vehicles could impact earnings by late May, with Korea Ratings estimating a 5 trillion won reduction in combined operating profit. Hyundai and Kia hold two to three months of pre-tariff U.S. inventory. Hyundai Motor CFO Lee Seung-jo stated: “We’re shifting U.S.-bound exports currently made in Mexico to U.S. plants, and reallocating Canada-bound production from the United States to Mexico.” The group’s tariff response task force is reconfiguring production and supply chains to mitigate impacts.
The record-breaking quarter highlights Hyundai and Kia’s global strength, driven by eco-friendly vehicles and strategic markets, while proactive measures address emerging trade challenges.
