Hyundai is optimistic: sales will return to normal

Hyundai expects sales to return to pre-pandemic levels this year, when the microchip crisis eases.

Hyundai Motor hopes that the shortage of semiconductors affecting the global auto industry will be reduced in the next quarter and that its sales will return to pre-pandemic levels this year, according to Gang Executive Vice President Gang Hyun Seo.

Speaking on a call from quarterly earnings, Gang said the current chip crisis is likely to continue until the end of this quarter and then production could return to normal.

Hyundai said operating profit for the three months to December was down 6.8% from a year earlier to 1.53 trillion won or $ 1.28 billion.

Consolidated net income fell 57% to 546 billion won. However, sales were 31 trillion won, up 6.1% and slightly higher than estimated, due to a weaker Korean won and sales of value-added products.

Hard year for Hyundai

The carmaker’s overall sales fell 15% in the last quarter, down 43% in China. Sales in South Korea and North America fell by 8.9% and 7.9%, respectively. But Europe was a good market for Koreans, with a 7% increase.

Hyundai aims to sell 4.32 million vehicles this year, including a 30% increase in green cars. These will account for up to 40% of sales in Europe, compared to 32% in 2021, the company said. Its new all-electric Ioniq 6 car will be launched in South Korea in the first half of the year.

Pyoung-Mo Kim, an analyst at Seoul-based DB Financial Investment, said a return to normal production for Hyundai could be postponed until later this year as chip makers such as Taiwan Semiconductor Manufacturing Co. could raise prices.

In addition to supply chain problems, higher commodity prices have been a burden. Hyundai said in November that the price of iron ore in the third quarter rose 63 percent from a year earlier to $ 165 a tonne, while aluminum rose 40 percent to $ 2,384 a tonne and copper up 48% to $ 9,188.