Hyundai Motor Group cruising toward 10% share in US

By Baek Byung-yeul

With Hyundai Automotive Group showing increasing sales performance in the U.S. market thanks to strong sales of SUVs and electric vehicles (EVs), all eyes are on whether the carmaker giant's market share in the U.S. will be able to grow over 10 percent for the first time.

Since the automotive group entered the U.S. market in 1985, the U.S. has been its major source of revenue along with its home turf market Korea.

Industry analysts said Monday that car production disruptions stemming from vehicle chip shortages will come to a head in the April-June period, but the automotive group is expected to see improved profitability as SUVs and its luxury brand Genesis are increasingly sold there.

“Hyundai Motor's North America branch posted net profit of 109.3 billion won in the first quarter, turning to a surplus year-on-year. The company is expected to log improved profitability in the second quarter as well,” said Lee Jae-il, an analyst at Eugene Investment & Securities.

Kim Pil-soo, an automotive technology professor at Daelim University College, said the automotive group is likely to increase its market share to 10 percent in the U.S. as its products are being sold to American consumers at the “right price” through improved quality. He added a 10 percent market share will be a meaningful milestone for Hyundai, as it proves the automotive group is on the right path.

“The U.S. market is the starting point of technology. Being recognized there is the most important step towards becoming a global brand. Since last year, quality improvement of Genesis, Hyundai and Kia have risen to a global level,” the professor said during a recent video interview.

Despite being hit by the COVID-19 pandemic, the automotive group, which is selling its vehicles under three brands ― Hyundai, Kia and luxury brand Genesis ― logged improved performance in the U.S. market last year as the three had an 8.4 percent share, up 0.6 percent from 2019. This was the second-highest record since 2012 when it had an 8.7 percent market share.

Hyundai and Kia have continued to show increased sales in the U.S. this year. The automotive group said the number of combined car sales of Hyundai and Kia there in April increased by 127.1 percent to 150,994 compared to April 2020.

Including Genesis cars, Hyundai sold 80,817 vehicles, up 132.4 percent year-on-year, and Kia sold 70,177 cars, up 121.3 percent year-on-year.

Given the automotive group has been struggling to improve its market share in China, which has the world's biggest car market, the U.S. market is becoming more important to Hyundai.

In 2020, Hyundai and Kia sold around 664,744 cars in China, down 26.9 percent from a year earlier. Compared to 2016 when they sold around 1.8 million vehicles, which was the highest sales figures to date, the figure was decreased by 63 percent.

While the group is making efforts to attract more drivers in China by launching its luxury brand Genesis as well as EVs and China-specific models, industry views are that Hyundai needs more time to bounce back to its full former glory.

Considering this situation, Hyundai Motor Group is strengthening its focus on the U.S. market. During President Moon Jae-in's visit to the U.S. in May, the company announced plans to invest $7.4 billion in expanding EV production and infrastructure there.

This is to capitalize on President Joe Biden's energy policy, which is centered on boosting clean energy-related industries. Having a local EV production line is essential for Hyundai as the Biden administration plans to offer sales rebates and tax incentives for the purchase of EVs manufactured in the U.S. Hyundai is scheduled to roll out its latest EV model Ioniq5 there this fall.