Hyundai Motor, Kia to near double-digit operating margin in Q1

[Graphics by Song Ji-yoon and Han Yubin]

Hyundai Motor Co. and Kia Corp. are expected to post a combined operating margin of 9.9 percent for the first quarter of this year, thanks to increased sales of high value vehicles and weak currency.

According to data from financial research firm FnGuide Inc. on Tuesday, Hyundai Motor and Kia are projected to post a combined sales of 64.4 trillion won ($47 billion) for the first quarter and an operating profit of 6.36 trillion won.

The sales figure is up 4.8 percent from the same period a year ago while the operating profit is down 1.6 percent.

The combined operating margin is estimated to reach 9.9 percent in the first quarter.

Hyundai Motor and Kia sold 1,763,137 cars in the January-March period globally, down 1.5 percent from the same period a year ago. They sold 297,589 vehicles in Korea during the cited period, down 10.6 percent from last year.

The sluggish demand has been offset by the automakers’ strong sales in the United States, their largest market.

Hyundai Motor’s high-end Genesis has notably achieved 17 consecutive months of year-over-year sales growth in the U.S. from November 2022 to March 2024.

Furthermore, sales of the two automakers‘ eco-friendly vehicles in the U.S., which encompasses electric, hybrid, and hydrogen models, set a new quarterly record by surging by 17 percent in the first quarter compared to last year.

Beyond increased sales of high-value vehicles in the U.S., the automakers benefit from a favorable exchange rate environment.

In the first quarter of this year, the Korean won depreciated to its lowest level against the dollar in 15 years, standing at 1,331 won per dollar.