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Hyundai Motor's Genesis GV80 South Korea’s two largest automakers – Hyundai Motor Co. and Kia Corp. – are expected to post their highest-ever profit for the second quarter and the whole year despite the industry’s dim outlook amid higher costs and murky situations in China and Ukraine.Hyundai Motor will likely post 2.14 trillion won ($1.66 billion) in operating profit for the April-June period while Kia’s operating profit is forecast at 1.71 trillion won, bringing their combined quarterly profit to an all-time high of 3.85 trillion won, according to the market consensus on Monday.In the first quarter of this year, the two companies ran a combined operating profit of 3.54 trillion won.For the full year, Hyundai Motor’s and Kia’s operating profits are forecast to reach 8.29 trillion won and 6.57 trillion won, respectively, bringing their total to 14.86 trillion won. If realized, the companies’ earnings will surpass their previous record high of 11.96 trillion won in 2012.Last year, Hyundai Motor and Kia earned a combined 11.74 trillion won on the operating level.The rosy prospects come as global automakers witnessed declining sales and profits as soaring inflation fears, coupled with the resurgence of the COVID-19 pandemic in China and the ongoing Russia-Ukraine war, spook new car demand.Analysts said Hyundai and Kia will likely be less affected by growing external uncertainties thanks to the growing popularity of the Korean duo’s eco-friendly vehicles, including electric models. Hyundai's Genesis GV80 LOWER DEALER INCENTIVES, SHALLOWER INVENTORYLast month, Hyundai said its premium Genesis brand saw considerable growth in its US car sales as all other major carmakers reported a significant drop amid a continued automotive chip shortageGenesis was the only brand among major carmakers that posted sales growth in April while Kia said its accumulated US sales passed the 10 million mark for the first time since deliveries began in 1993.Strong retail demand has also lowered the two Korean carmakers’ global car inventory to a record-low level of about one month’s worth of vehicles, down from the usual three months to four months, and slashed incentives offered to dealers.According to automotive pricing and information service providers, dealer incentives in April for Hyundai and Kia cars in the US fell to $597 and $834 per unit, respectively, down 76% and 68% from a year ago.Their incentives are lower than that of the Korean carmakers’ archrival Toyota Motor Corp., which paid out $855 a car. The figures compared with Ford Motor Co.’s $1,523 and General Motors Co.’s $2,046. The Kia EV6 ‘SORRY ELON MUSK’Hyundai’s rise to one of the coveted automakers in the US market has been driven by sport utility vehicles and premium Genesis models, and now by electric vehicles.Bloomberg News, in a recent report titled “Sorry Elon Musk. Hyundai Is Quietly Dominating the EV Race,” said that it took Tesla Inc. a decade to deliver as many electric cars as Hyundai managed in a few short months.Earlier this year, the Korean automotive group rolled out two new battery-powered cars – the Hyundai IONIQ 5 and the Kia EV6 – which promptly tore up the sales charts, passing the Nissan Leaf, Chevrolet Bolt and every other electric vehicle on the market not made by Tesla.In the US this year through May, the Korean duo sold 21,467 of the two models, besting even the popular Ford Mustang Mach-E, which was snapped up by 15,718 drivers.“From an EV perspective, they (Hyundai and Kia) are just kind of cleaning the room,” Bloomberg cited car information provider Edmunds.com analyst Joseph Yoon as saying. “I don’t know if any dealers around me have any in stock.”In his recent tweet, even the Tesla chief executive said: “Hyundai is doing pretty well.”“EVs usually fetch higher profits than gasoline and diesel cars. The growing popularity of Hyundai and Kia’s electric models bodes well for their profitability in coming quarters,” said Hana Financial Investment analyst Song Sun-jae.On Seoul’s stock market on Monday, Hyundai Motor’s shares finished up 5.8% at 183,000 won, outperforming the broader market index Kospi’s 1.5% gain. Kia closed up 4.4% at 80,900 won.By Han-Shin Parkphs@hankyung.comIn-Soo Nam edited this article.
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