Customer Logins
Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Customer LoginsSame-Day Analysis: Hyundai-Kia post 9.4% y/y decline in combined January global sales
Hyundai and its affiliate Kia reported a 9.4% year-on-year decline in their combined global sales during January, as demand in overseas markets slipped, affecting the automakers' overall sales performance.
IHS Automotive Perspective
- Significance: Hyundai and its affiliate Kia have reported combined global sales of 542,697 units for January, down 9.4% year on year (y/y).
- Implications: Hyundai posted a sluggish performance in both domestic and overseas sales. Kia's domestic sales continued to improve, although its overseas sales slipped 5.3% y/y in the month.
- Outlook: Success in foreign markets is crucial for the duo as they depend on overseas sales for more than 80% of their global sales. Although they have been launching a raft of models to retain consumers' interest, ongoing slowdowns in key markets such as China and South Korea, amid increasing competition from global automakers, are likely to make it difficult for the group to achieve its combined global sales target of 8.13 million units during the full-year period in 2016.
Hyundai and Kia recorded combined global vehicle sales of 542,697 units in January, according to separate data releases issued by the two companies and compiled by IHS Automotive. This total was down 9.4% year on year (y/y) from 598,816 units in January 2015. Hyundai's global sales declined 12.5% y/y to 338,035 units last month, with domestic sales down 1.1% y/y to 49,852 units. Although passenger car sales gained 1.1% y/y to 24,852 units, sport utility vehicles (SUV) sales edged down 0.3% y/y to 10,518 units, and commercial vehicle sales also continued to decline, by 5.2% y/y to 14,482 units. In overseas markets, Hyundai recorded a drop of 14.3% y/y to 288,183 units in the month. While exports fell by 22.8% y/y to 72,562 units, sales from overseas plants declined 10.9% y/y to 215,621 units, of which Hyundai's Chinese plants sold 75,000 (down 27.4% y/y) and its Indian factories 44,200 (down 1.3% y/y). US plant sales totalled 30,851 units (up 14.3% y/y), followed by the Czech Republic with 28,200 units (up 9.6% y/y), Turkey with 19,800 units (up 28.9% y/y), Brazil with 7,000 units (down 38% y/y), and Russia with 6,700 units (down 51.4% y/y). Hyundai's Chinese commercial vehicle subsidiary accounted for 3,766 units in January, up 367.8% y/y, while consignments of vehicles produced by Turkish commercial vehicle manufacturer Karsan totalled 104 units.
Meanwhile, Kia posted a sales decline of 3.6% y/y in its global volumes to 204,662 units in January. Kia registered a 13.2% y/y slide in its Chinese volumes during the month to 50,361 units, while its sales in North America fell by 0.2% y/y to 41,906 units. Nevertheless, sales in the domestic market of South Korea remained positive, up 4.6% y/y to 38,505 units, while sales to Europe grew by 2.3% y/y to 38,446 units during the month. Kia's sales in "other general markets" - including Central and South America, the Caribbean, Asia (excluding China and South Korea), the Pacific, and the Middle East and Africa - totalled 35,444 units (down 6.6% y/y). The brand's top-selling cars last month were the Sportage (36,989 units), the Rio/K2 (30,222 units), the Cerato/Forte/K3 (23,947 units), the Optima (16,696 units), and the Soul (12,186 units). It should be noted that IHS Automotive figures for Kia differ from the company's due to the inclusion of the Saipa brand for the Iranian market.
Combining the monthly sales data for the two automakers, Hyundai-Kia's domestic sales increased 1.3% y/y to 88,357 units, mainly due to Kia, although their combined overseas sales fell by a significant 11.2% y/y to 454,340 units, as both brands registered declines.
Outlook and implications
Hyundai and Kia posted a sluggish sales performance during the full-year period in 2015, as overseas markets dragged, outweighing improvements in their domestic market. Hyundai and Kia depend on overseas markets for nearly 85% of their global sales volumes, and have come under severe pressure from rising competition from global automakers, especially Japanese OEMs, which have had the advantage of a relatively weak yen. Although Hyundai and Kia managed to perform well in the domestic market and the United States last year, the group witnessed a turbulent 2015 in China and key European markets such as Russia as a result of slow vehicle demand there. The duo are now targeting combined global sales of 8.13 million units in 2016, a reduction in their original global sales goal and also less than the 8.2 million units they had sought during 2015. Of this total, Hyundai is aiming to sell 5.01 million units, while Kia is aiming to sell 3.12 million units in global markets. The group has not revealed the breakdown of its expected 2016 sales by market. Hyundai Group chairperson Chung Mong-koo emphasised at that time that the duo would focus on enhancing brand identity by launching several environment-friendly cars and aggressively promoting sales of luxury models, which are also more profitable.
Domestic demand conditions are expected to improve following a slump in January with the government's decision to reinstate the tax break on domestic models by six months until the end of June this year. As far as the Hyundai brand is concerned, the automaker is expected to perform reasonably well in its top-three best-selling markets during 2016: sales in China are predicted to grow by 1.3% y/y, in the United States by 0.1% y/y, and in South Korea by 3.9% y/y. But Hyundai is expected to register a turbulent performance in all other markets including India, Brazil, Russia, Australia, and a few Middle East/African countries. Globally, Hyundai's Avante, Tucson, and Verna models are expected to see positive sales in 2016, although sales are predicted to fall for all other models including the Sonata and Santa Fe.
In key global markets Kia is expected to post a positive trend only in the United States, with a modest 1.2% y/y improvement. Kia's sales are likely to remain under pressure in China, South Korea, and markets in Europe including Russia and United Kingdom. Sales of Kia's Sorento, K3, and Morning are expected to perform well on a y/y basis, although all other models including the Sportage and the Rio are expected to struggle globally this year.
IHS Automotive maintains a more conservative forecast than the South Korean group, expecting the two brands to post combined global sales of 7.46 million units in 2016, short of their ambitious sales forecast of 8.13 million units. We expect Hyundai's total sales, including light, medium, and heavy commercial vehicle sales, to come in at 4,690,561 units, down 0.8% y/y, while Kia's total sales are predicted at 2,799,683 units, down 0.4% y/y. The new Hyundai Genesis brand is expected to record sales of 39,042 units in 2016 globally, while sales of the China-only Horki brand is predicted at 1,120 units. Some variance between our figures and Hyundai's reflect different counting methodologies and regions included.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.