Hyundai Motor Shares Rally After Sales Make Resilient Start to 2024

By Kwanwoo Jun

Hyundai Motor's shares rallied after its vehicle sales got off to a resilient start in 2024 in spite of softer demand in the U.S.

The South Korean carmaker's stock finished 9.1% higher at 227,000 won ($170.71) on Friday, outperforming the benchmark Kospi's 2.9% gain. That was the stock's biggest one-day rise since June 2023, according to FactSet.

The gains came after Hyundai Motor's total vehicle sales increased 1.8% year-over-year in January despite a 9.0% plunge in the crucial U.S. market.

Economic challenges and higher interest rates created a tough retail environment in the U.S., but sales of electric vehicles and plug-in hybrid electric cars sustained substantial growth in January, according to Hyundai Motor America.

The carmaker's relatively weak January vehicle sales were also affected by its Asan factory, which temporarily suspended operations to prepare for the production of new Ioniq 7 electric vehicles in South Korea, Nomura analysts Angela Hong and Akash Gupta said in a research note.

The Nomura analysts forecast that Hyundai Motor's wholesale growth could remain soft but that its operating margin has scope to stay solid in 2024 thanks to likely lower raw-material prices, stable average selling prices for its models, and its higher market penetration of profitable EVs.

"Hyundai plans to launch the Ioniq 7 and Casper EV in 2024, which we believe will help the company to deepen its EV penetration despite slowing EV demand globally," they said.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

February 02, 2024 02:00 ET (07:00 GMT)

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