Hyundai Motor Group aims to rebound in the fourth quarter by overcoming production disruptions from last quarter's strike and the burden of U.S. tariffs, treating this period as a turning point for sales and profitability recovery. Hyundai will focus on regaining lost production volumes due to the strike, while Kia will prioritize increasing supply of high-margin hybrid electric vehicles (HEVs) in the United States.
According to industry sources on the 8th, Hyundai has set a goal to recover more than 90% of approximately 50,000 units lost during this year's wage negotiations by the end of the year. Kia plans to further boost its global HEV sales volume, currently at around 55,000 units per month.
Hyundai experienced a total of 60 hours of strikes during this year's wage negotiations. On the 21st of last month, an eight-hour full-scale strike was implemented for the first time in 10 years since 2016, halting production lines at Ulsan, Asan, and Jeonju plants. The automotive industry estimates cumulative production disruptions at approximately 55,200 units, with corresponding revenue losses exceeding 2.3 trillion won.
Hyundai has begun expanding production starting this month. By adjusting production volumes and model-specific allocations, the company plans to recover more than 90% of disrupted output by year-end. Based on industry estimates of the disruption scale, a simple calculation indicates that approximately 50,000 units must be recovered within the year.
The effects of increased production are expected to begin mid-month and fully take off next month. In the automotive industry, the fourth quarter is a period when promotional activities for meeting year-end sales targets coincide with new model deliveries. For Hyundai, expectations for recovery are high due to the combined effect of base-year impacts from third-quarter production disruptions and expanded deliveries of key new models.
The eighth-generation Avante, whose contracts began last month, recorded 11,094 units contracted on its first day, setting a new all-time record. Once customer deliveries commence, the fourth quarter will effectively become the first period with complete sales performance data. The launch of the completely redesigned Tucson is also scheduled for the fourth quarter. Both models are representative global volume (popular) models for Hyundai, so production normalization is expected to translate into actual sales recovery. Additionally, high demand for top-tier trims and HEV models during the initial phase of new car launches contributes to improvements in average selling prices and profitability.
Kia aims to increase sales volumes by leveraging HEVs. While maintaining its current monthly electric vehicle (EV) sales flow at around 40,000 units through the second half of the year, Kia will additionally expand HEV sales to approximately 55,000 units per month.
High-margin SUVs produced and sold in the United States are also expected to drive Kia's performance improvement. Last month, Kia confirmed plans to increase Teluride's annual production capacity from 120,000 units to 180,000 units—a 50% increase. This follows the production expansion plan announced in April for an additional 180,000 units annually.
Sportage HEVs manufactured at Hyundai Motor Group MetaPlant America (HMGMA) will begin deliveries to local customers starting in the second half of the year. Since both Teluride and Sportage HEVs are produced in the United States, expanded sales will reflect reduced import tariff burdens. Additionally, Kia plans to introduce the Seltos HEV to the U.S. market by the end of the fourth quarter.
Kia's HEV sales are showing a steep upward trend. Global sales volume for the second quarter reached 178,000 units, a 61% increase compared to the same period last year. U.S. sales amounted to 66,000 units, representing a 151.6% increase. Meanwhile, Kia's U.S. sales last month totaled 83,793 units, setting a new all-time monthly record.
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