SEOUL, Jan. 31 (Korea Bizwire) — South Korea’s three listed carmakers are betting big on sport-utility vehicles (SUVs) to bolster sales in 2019 after posting lower-than-expected earnings results last year.
With ongoing trade friction between the United States and China and the global economy slowing down, Hyundai Motor Co., Kia Motors Corp. and SsangYong Motor Co. aim to rebound in sales by launching competitive SUV models in major markets this year.
The maker of the Sonata sedan and the Elantra compact has recently taken the wraps off of its flagship Palisade SUV in the domestic market, with its overseas launch scheduled for this summer. It plans to add very small and top of the line GV80 luxury SUV models wearing the Genesis badge to the lineup by December.
Particularly in China, it plans to market the all-new Santa Fe SUV, which was launched in the U.S. last summer, and the ix25 compact SUV, along with the next-generation Sonata sedan, due to be released in March and three environment-friendly cars.
Kia, with its well known K5 (or Optima) sedan and the Carnival minivan, said it will “make 2019 a turnaround year” by launching three new models — the Telluride, the all-new Soul box car and an entry-level crossover, with the project name of SP2, in the U.S. market.
Hyundai and Kia together form the world’s fifth-biggest carmaker by sales. They are core affiliates of Hyundai Motor Group, the country’s second-largest conglomerate by assets after Samsung Group.
As the carmakers were not quick to respond to booming demand for SUVs, they came up with lower-than-expected business results last year. The won’s strength against the dollar and currencies in emerging markets also weighed on their bottomline.
For the whole of 2018, Hyundai posted a 64 percent on-year plunge in net profit to 1.64 trillion won (US$1.47 billion) from 4.54 trillion won a year earlier on strong won and weak demand in the U.S. and China, the world’s two biggest automobile markets.
Operating profit fell 47 percent year-over-year to 2.42 trillion won last year from 4.57 trillion won. Sales gained 0.9 percent to 97.25 trillion won from 96.37 trillion won.
Kia’s net income rose 19 percent to 1.156 trillion won from 968 billion won during the same period. Operating profit jumped 75 percent to 1.15 trillion won from 662.2 billion won, with sales up 1.2 percent to 54.17 trillion won from 53.53 trillion won.
But the results reflect a technical rebound after years of poor performances in overseas markets.
Hyundai and Kia aim to sell a combined 7.6 million vehicles this year, slightly higher than 7.4 million units they sold last year.
SsangYong Motor saw its net losses slightly narrow to 61.84 billion won in 2018 from the previous year’s 65.82 billion won on increased sales of the Rexton Sports and Tivoli SUVs.
Operating losses remained almost unchanged at 64.18 billion won compared with 65.28 billion won during the cited period. Sales rose 6 percent to 3.71 trillion won from 3.49 trillion won.
In 2018, SsangYong Motor sold 141,995 autos, down 1.2 percent from 143,685 a year ago. Indian carmaker Mahindra & Mahindra Co. owns a 72.85 percent stake in the SUV-focused carmaker.