Hyundai Motor says it will continue to prioritise production of higher-profit SUVs and luxury models amid ongoing market volatility and disruptions.
The company this week announced its quarter three business results, headlined by 30 per cent revenue growth and 14 per cent sales growth. Net profit dipped, but due to “one-off quality-related warranty provisions” as opposed to a leaner product mix.
Hyundai’s EV model sales also surged about 27 per cent from Q3 a year earlier to around 52,000 units, equal to 5.1 percent of its total sales volume.
However, the company readjusted its annual global sales estimate to 4.01 million units from 4.32 million units, as “unstable supply chain conditions around the globe continue to weigh on production”.
“While Hyundai Motor expects a gradual recovery from global chip and component shortages in the fourth quarter, the company anticipates external uncertainties to continue, including inflation, supply chain disruption and fluctuation in raw material prices due to geopolitical issues,” the company added.
“In addition, the company expects currency rate volatility as well as increasing marketing costs due to fiercer competition among automakers as a burden for the rest of this year.”
Hyundai said its main coping mechanism would be to “focus on the recovery of sales through an optimised production-sales plan in global operations that will enhance its product mix with SUVs and luxury models to secure robust profitability”.
Strip out the corporate waffle and this means Hyundai will prioritise its cars with the highest profit margins, pointing to any shortages affecting cheaper vehicles.
This tactic is one mirrored by Kia, which likewise posted good revenue and sales growth over Q3, plus retail sales of its BEV models totalling 40,000 units, a 34.3 per cent increase.
“Kia plans to continue expanding sales of electrified models with competitive models such as the EV6 and also focus on high margin SUV models in order to increase profitability,” the company said.
“Furthermore, the company will continue improving the product and trim mix in line with Kia’s enhanced brand perception,” it added – suggesting a focus on top-of-the-range models, which could potentially be good news for those on EV6 and Sorento wait lists…