Hyundai Motor is projected to fall behind Kia in quarterly performance. Once a leader in group results, Hyundai is expected to cede profitability to Kia, with sales also anticipated to decline for the first time in six years.
According to the securities industry on October 12, Hyundai and Kia's third-quarter operating profit forecasts are 2.3758 trillion won and 2.4060 trillion won, respectively, with Hyundai trailing Kia by 302 billion won. In the past decade, Hyundai has only lagged behind Kia in quarterly operating profit three times: in the third and fourth quarters of 2020 and the fourth quarter of 2025.
Hyundai's sales, a key measure of growth, are expected to decrease by 4.1% to 44.8014 trillion won. This marks the first decline in quarterly sales compared to the same period last year since the second quarter of 2020, when the COVID-19 pandemic had a significant impact. If this trend continues, Hyundai will end a streak of 24 consecutive quarters of sales growth that began in the third quarter of 2020.
The poor performance of Hyundai is attributed to production disruptions caused by union strikes and the aging of existing models. The strikes resulted in a production shortfall of over 50,000 units, leading to a global sales drop of 11.5% year-on-year in the third quarter, totaling 915,026 units.
In contrast, Kia achieved a record third-quarter performance with a 7.8% increase in sales, totaling 846,764 units. The company saw balanced growth in key markets, with sales in the U.S. rising by 8.5% to 244,702 units, in Europe by 17.6% to 145,834 units, and in India by 38.5% to 89,242 units. While Hyundai struggled with production issues and declining sales, Kia expanded its sales base in major markets, improving its performance outlook.
Additionally, the weakening effect of exchange rates, which had supported Hyundai's first-half performance, has become a burden. The average exchange rate of the won to the dollar fell from 1,502 won in the second quarter to 1,420 won in the third quarter, resulting in a decrease of about 400 billion won in operating profit. Although the U.S. export tariff rate dropped from 25% in the third quarter of last year to 15% this year, the impact of poor sales and rising raw material prices offset the benefits of the tariff reduction.
Recent trends in eco-friendly vehicle sales have also been identified as a factor differentiating the performance of the two companies. While Hyundai's sales are supported by relatively profitable hybrid vehicles (HEVs), Kia is expanding its sales focus on North American hybrids and European battery electric vehicles (BEVs). The recent shift in automotive sales towards electric vehicles has posed challenges for Hyundai.
Hyundai is seeking to turn its fortunes around by introducing new models and expanding its eco-friendly vehicle lineup. However, it will take time for the effects of new models to translate into actual sales increases, making it crucial for the company to quickly recover from production disruptions and fill the sales gaps of existing models to restore its performance.
Kim Jun-sung, a researcher at Meritz Securities, stated, "The sales performance of Hyundai and Kia, which have shown similar trends, has diverged in 2026. The differing sales strategies for new energy vehicles, including electric vehicles, are the cause of this decoupling."
* This article has been translated by AI.
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