Hyundai Motor Group becomes the third-largest automaker in the world
Hyundai Motor Group has become the world’s third-largest automaker despite a chip shortage, and its subsidiary Kia sells about 9% of its cars in India. What to expect next?
Hyundai Motor Group said it ranked third in global vehicle sales in the first half of this year, the first time for the country’s largest automaker. According to sales data, Hyundai Motor Co., its luxury brand Genesis, and its subsidiary Kia Corp. sold a total of 3.299 million vehicles in global markets between January and June of this year. The sales figure is third behind Toyota Motor Group’s 5.138 million units and Volkswagen Group’s 4.006 million units.
Hyundai Motor became the fifth-largest passenger car manufacturer in the world back in 2010, and since then its development has been more or less synchronized with competitors. Hyundai’s ranking has risen from 5th place year-over-year, surpassing the Renault-Nissan-Mitsubishi alliance and Stellantis Group, which sold 3.14 million units and 3.019 million units in the first half.
While its global competitors were hit hard by the shortage of chips, Hyundai weathered the crisis as they were able to anticipate a possible shortage of chips in 2021, so they stocked up on them back in 2020 and were able to secure a sufficient supply of chips.
In addition, strong sales of Genesis vehicles and the launch of new electric vehicles also contributed to overall sales growth. In the US alone, Genesis sold a total of 25,668 units in its first six months, marking the brand’s best sales performance in a critical market.
Hyundai Motor Group predicts that its products will now gradually increase as supplies of semiconductors and other parts improve. The company also plans to increase its presence in the market by launching many new vehicles. Hyundai Motor Co.’s first electric sedan, the IONIQ 6, will go on sale in September. In addition, the Santa Fe Hybrid and the Genesis GV70 electric car will start rolling out of the Alabama plant in the US in October and December, respectively. Hyundai Motor will actively promote the two models in the US market. Kia will also launch a high-performance EV6 GT electric car in the third quarter. The company plans to increase sales of its environmentally friendly vehicles by 30% this year.
Despite the strong performance, Hyundai’s first-half sales fell 5.1% year-over-year, possibly due to supply chain disruptions and lower consumer demand. However, the drop wasn’t as bad considering that its larger rivals, Toyota and Volkswagen, saw sales drop by 6% and 14% over the same period. The Renault-Nissan Alliance and GM also suffered sales losses of 17.3% and 18.6% year on year.
India accounted for 9% of Kia Motors’ global sales in July
According to Kia’s July sales reports, India accounted for 9% of the Korean automaker’s global sales of 257,903 units last month. While total sales increased 6.3% year-on-year, sales in India showed double-digit growth.
In the Indian market, the company shipped 22,022 units in July, up 47% from the 15,016 units sold in July 2021. The automaker sold 8,451 Seltos and 7,215 Sonets last month. In addition, 5,978 Carnes and 288 Carnival units were sold.
Outside of Korea, Kia’s sales were 206,548 vehicles, up 6.2% from the previous year. The Sportage and Seltos SUVs continued to lead Kia’s sales with sales of 36,480 and 22,768 units, respectively. In addition to India, Asia-Pacific, the Middle East, Africa, and regions of South and Central America all posted strong sales.
Chip shortages: current problems and forecasts
The pandemic has led to the closure of several companies, resulting in reduced production and changing supply chains. In the world of technology, where silicon microchips are an important part of everything electronic, the lack of raw materials has become an obstacle to the creation and development of new products.
During periods of lockdown, some essential workers were forced to stay at home, which meant chip production was unavailable for several months. By the time the lockdown was lifted, and the world accepted the new normal, the growing demand for consumer and business electronics was enough to cause fluctuations in the supply chain.
In modern cars, microchips perform several vital functions: almost 17 automakers in North America and Europe have slowed or stopped production due to shortages of computer chips, analysts said. Major automakers such as Tesla, Ford, BMW, and General Motors have been affected. The main consequence of this is that the global automotive industry will produce fewer cars than previously planned.
Manufacturers themselves began to solve the shortage problem
The world’s largest semiconductor manufacturer — Taiwan Semiconductor Manufacturing (TSMC) — is going to invest about $100 billion in the development and expansion of chip production in the next three years. Last year, TSMC already invested $30 billion in this area, and this year it is going to invest $40 billion to $44 billion.
In 2021, the American corporation Intel announced that it would invest $20 billion in the development and production of chips. A significant part of the investment will go to the construction of two new semiconductor manufacturing plants in Arizona. Another $9 billion plant could be built in Italy.
Samsung said late last year that it intended to build a semiconductor plant in Texas. It will cost the company $17 billion. In general, by 2030 the company intends to spend $150 billion on this industry.
Swiss and US semiconductor makers STMicroelectronics and GlobalFoundries signed an agreement this month to jointly build a new 300 mm wafer facility in France at a cost of $5.7 billion, according to Reuters.
Finally, Germany’s Bosch announced that it will spend €3 billion by 2026 to ramp up semiconductor production.
Ambiguous forecast
According to TopForex.trade experts, despite all these efforts, the global shortage of microchips has not yet been overcome and is unlikely to stop in the near future. So says Vinay Gupta, head of research at the Asia-Pacific division of the International Data Corporation (IDC). ASML CEO Peter Wennink warned back in the spring that it would not be possible to quickly increase the production of microchips, as plans for the commissioning of new factories would sooner or later begin to diverge from reality due to a lack of equipment. And some business representatives say the shortage of microchips will continue until at least the end of 2023.
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