By Choi Kyong-ae SEOUL, July 22 (Yonhap) — Hyundai Motor Co. and its affiliate Kia Corp., South Korea’s two biggest carmakers, on Thursday reported strong second-quarter earnings on a base effect and strong sales of their high-end SUVs. Hyundai’s net profit for the three months that ended in June jumped to 1.98 trillion won (US$1.7 billion) from 377.27 billion won in the same period last year, the company said in a statement. The strong result was helped by last year’s low base effect from the COVID-19 pandemic and robust demand for Hyundai’s high-margin SUV models that helped offset output disruptions by chip shortages, according to Seo Gang-hyun, an executive in charge of the company’s finance and accounting division. “Faced with worsening chip shortages in May and June, Hyundai was quick to change vehicles in production and lineups to minimize the impact from the parts problems. Such efforts allowed the company to navigate the chip shortage better than other carmakers,” he said. A combination of its improved product mix, lower incentives and higher average selling prices, particularly in the world’s most important U.S. market, also helped boost the quarterly profits, Hyundai said.
Kia’s net profit soared to 1.34 trillion won in the second quarter from 126.3 billion won a year ago.
Operating profit also jumped to 1.49 trillion won from 145.16 billion won, with sales climbing 61 percent to 18.34 trillion won from 11.37 trillion won.
In the first six months, Hyundai and Kia, which together form the world’s fifth-largest carmaker by sales, sold a combined 3.47 million vehicles, up 25 percent from 2.77 million units in the same period of last year.
They aim to sell a total of 7.08 million autos this year, 1.7 percent lower than the 7.2 million units they sold last year.
Hyundai’s and Kia’s shares rose 0.2 percent and 0.3 percent, respectively, to 228,500 won and 87,400 won, underperforming the broader KOSPI’s 1 percent gain.