After posting record profits in 2023, South Korean automaker Hyundai Motor Group plans to continue its strong performance via electrification and strengthening its local production systems.

The company’s focus for 2024 is on qualitative growth rather than quantitative expansion, with Hyundai Motor Co. and Kia Corp setting a combined sales target of 7,443,000 units, which is 1.9 percent higher than 2023. The duo’s combined revenue target is set at 271.89 trillion won ($203.1 billion), with an operating profit goal of 27.37 trillion won. The target operating profit margin is 10.1 percent, as both companies aim to achieve double-digit profit margins (on a combined basis) following the previous year’s performance.

Hyundai Motor Group anticipates that demand in the global automotive market will hit 84.12 million units in 2024, up 1.6 percent from the previous year, while also expecting the global car market to be in a demand-driven environment as the year unfolds as buying sentiment cools and demand for new vehicles shrinks.

The company’s confidence in maintaining a double-digit profit margin is also backed by its strengthening of local production systems. Hyundai Motor and Kia are set to begin selling electric vehicles (EVs) that were made in Korea in the United States in 2024. Kia will start producing the EV9 in its West Point, Georgia, plant from the second quarter of the year, while Hyundai Motor Group Metaplant America (HMGMA), a dedicated EV plant with an annual production capacity of more than 300,000 units, is expected to begin operations as early as the third quarter.

Until now, Hyundai Motor Group was unable to meet local production requirements under the U.S. Inflation Reduction Act (IRA), which means it did not benefit from subsidies of up to $7,500 for sales to consumers. Despite this disadvantage, Hyundai Motor and Kia ranked second behind Tesla Inc. in the U.S. EV market in 2023 with a 7.9 percent share by increasing their share of commercial EV sales, such as leasing and rentals, which are eligible for IRA benefits. Starting this year, the IRA benefits will be extended to include general retail vehicles, which is expected to boost their EV sales and profitability in the U.S. market.

Hyundai Motor Group will strengthen its market position even further with its EV lineup in 2024. Hyundai Motor has already halted operations at its Asan plant since the end of 2023 to proceed with construction work for production facilities for the Ioniq 7.

Hyundai Motor and Kia also aim to generate new demand by enhancing their localization strategies in emerging markets. Kia plans to open a new sales subsidiary in Thailand, the second-largest automobile market in Southeast Asia, by the end of January 2024.

Hyundai Motor is set to expand its production capacity in India, with the total production capacity of Hyundai Motor and Kia in India set to increase from the current 1.17 million units to about 1.35 million units in 2025.

By Moon Gwang-min and Yoon Yeon-hae

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